Hanza: Organic growth brings a need for increased capacity
Swedish EMS provider Hanza reported increased sales in the third quarter of 2023 and expects growth to continue in 2024.
The operating margin increased significantly, reaching a record high of 9.3% and the positive earnings trend continues down to the bottom line.
During the third quarter, Hanza's net sales increased by 14% to SEK 955 million (EUR 81.6 million), from SEK 838 million (EUR 71.6 million) during the same period a year ago. Operating profit (EBITA) increased from SEK 50 million (EUR 4.2 million) during the third quarter last year, to SEK 89 million (EUR 7.7 million). Profit after tax ended up at SEK 49 million (EUR 4.1 million), a clear increase from SEK 26 million (EUR 2.2 million) during the comparison period.
”Due to vacations, the third quarter comes with some capacity challenges, and it is also our weakest quarter in terms of sales. Therefore, we are pleased to see an underlying organic growth of 10%,” says CEO Erik Stenfors in the report. ”By creating higher customer value, we attract new customers and enable higher earnings. We continue to increase our margin, and in Q3 we achieved the Group's highest ever operating margin of 9.3%.”
Looking at 2024, Stenfors says that the company sees continued growth from its existing customer base. In particular, Hanza is noting an increased demand in the "Other Markets" segment next year, which has had a lower growth rate than the company's "Main Markets" segment.
”Organic growth brings a need for increased capacity. We ensure this primarily through a cost-effective expansion of existing manufacturing clusters, what we call a modular expansion. We also continue to explore potential capacity acquisitions, and the number of possibilities has increased during the fall,” the CEO concludes.