“The first three quarters went well as a whole. Our net sales and EBITDA continued to grow in line with our strategy. Our liquidity remained at a very good level throughout the review period. However, the general uncertainty in the market has increased and it has also been reflected in the development of the order book of our main customers. At the same time, the decision-making time from submitting an offer to accepting an offer has been extended. This has been reflected in slowed new sales, as well as in delays in the start-up timings of new production. Despite this, production volumes have remained at a reasonable level for the end of 2023 as well, although in the short term, with general material and component availability improving, our customers have begun to pay more attention to working capital management and, with it, to optimizing inventory levels. Our liquidity has remained very good even after the review period.
Profitability was somewhat burdened by sector-specific wage agreements put in force in the first half of the year, which in addition to inflation significantly increased our costs. In the review period, profitability was also affected by production and quality challenges in Karkkila. These challenges began with scheduled maintenance related to one of the main production machines and lasted throughout the third quarter, contrary to the original schedule. After the review period, production has already normalized. However, we ensured deliveries to our customers on schedule, and our service capability throughout the Group has remained good despite changes in the operating environment.
In terms of our main raw materials and electricity, the cost development is largely tied to our customer agreements through indices that are reflected quarterly in our sales prices with a delay. We have also agreed on the transfer of non-indexed cost increases to our customer pricing where applicable during the review period.
The availability of raw materials and other materials has improved clearly and is currently at a good level. The purchase cost level has become to normalise and has partly decreased in the review period even though inflation remains fairly high. The availability of electricity is also currently good and due to the high level of gas reserves in Central Europe and the good water situation in the Nordics the uncertainty factors regarding the price formation of electricity in the coming winter have clearly decreased. However, the price fluctuations on a daily and even hourly basis is still significant. We monitor the development of the market and ensure the functionality of our own supply chaings in the future as well.
There are differences among customers and industries in order book, but the outlook has generally remained positive. Our customers are moving their production chains closer to Europe and its neighbouring regions more actively to improve their operating conditions in terms of risk management and sustainability. The company’s sustainability work and its role as a local operator are clearly competitive advantages for Componenta. We are currently preparing for regulatory changes that will be implemented in the near future, as well as preparing our long-term targets and action programmes.
We will actively continue our efforts to strengthen our market position and further improve our profitability as part of our growth strategy. We are currently preparing and updating our strategy for the next three years. We are aiming to be the primary supplier with an extensive offering for our customers.”