Nolato's New CEO Is Re-Cutting the Company Before He Re-Rates It

A first quarter under Anders Björklund: organic growth of 3%, Medical margins dented by the Hungary ramp, and an automotive excuse the market has not yet stress-tested

NOLA-B.ST · Earnings Call · 2026-10-29

The first call of the Björklund era is a reshuffling, not an update

Anders Björklund took over as CEO in mid-July, having previously run the very business area that is now shrinking. His debut quarter is therefore read less as a P&L event than as a statement of intent — and the statement is that Nolato will be re-cut before it is re-rated. On the surface it is respectable: sales up 7% to SEK 2.5bn, of which 3% organic, adjusted EBITDA margin down to 10.5% from 11.7%, adjusted operating profit SEK 262m against SEK 274m. Cash flow from operations improved to SEK 332m. But the substance sits in the portfolio note: two acquisitions closed in the quarter (Nolato Qualtech in Galway, Ireland, and Unitron across the Netherlands, Belgium and the US) bringing roughly SEK 600m of annual sales, plus a Romanian subsidiary with about SEK 70m of sales divested on 1 October. Unitron is the tell. It is “primarily a development company, which is engaging with the customers in early concept studies, and it's a perfect fit into our offering of volume production” — Anders Bjorklund, President and CEO · 2026-10-29. That is the same positioning shift the outgoing CEO described on his farewell call, when he said “we have changed our positioning from more a production partner to a development and production partner” — Christer Wahlquist, CEO · 2026-07-17. The difference is that Wahlquist talked about it as history; Björklund is buying it with cash and balance sheet — net debt to EBITDA has already doubled to 1.0x from 0.5x.

Hungary has flipped from the reason to own the stock to the reason the margin moved

The single most important change in this report is tonal, and it concerns the large medical programme in Hungary that has dominated Nolato's narrative for over a year — the ramp that was supposed to take Medical margins toward 13% and reach full volume around 2029. This quarter, Medical Solutions grew sales 12% to SEK 1.469bn, or 9% organically — genuinely good, with Drug Delivery carrying much of it alongside IVD, cardiology and pharma packaging. Yet segment EBITA margin fell to 11.3% from 12.1%. The cause is the ramp itself: “The negative gap in margin is mainly affected and explained by ramp-up of larger projects within Medical and remaining raw material lag” — Per-Ola Holmström, CFO · 2026-10-29. That is a defensible trade — you spend to fill a plant before you earn on it — but note what has quietly left the conversation. The 13% Medical margin ambition that anchored the Q3 2025 Q&A has not been restated. And the timeline has softened: a year ago the CFO said the effects “will ease up going forward gradually in small steps” — Per-Ola Holmström, CFO · 2026-07-17; today the guidance is “we expect to continue going forward some quarters, but we do expect it's getting better and better” — Per-Ola Holmström, CFO · 2026-10-29. "Some quarters" is not "small steps." Meanwhile the two acquisitions are framed as the route to a complete medical product offer — which is also a hedge against any single programme's timing.

Automotive: management is adamant this is not a demand story

Engineered Solutions reported flat sales of SEK 1.040bn but a 3% organic decline. The internals are dramatic. The Materials business grew 27% entirely organically — aerospace, automotive and telecom all contributing — lifting its share of the segment to 23% from 18%. Automotive, by contrast, fell from 22% to 17% of Engineered sales, and is now just 7% of the group. The exchange with Carnegie's Mikael Laséen is the most revealing thirty seconds of the call:

I would say it is pretty much everything. It's related to customer model changes.
Anders Bjorklund, President and CEO · 2026-10-29

Björklund would not concede a single point of underlying demand weakness, and repeated the point on the Q4 outlook: “the automotive headwind will remain in the fourth quarter for us” — Anders Bjorklund, President and CEO · 2026-10-29. That is a company-specific claim in a market that is broadly nervous about vehicle builds — a light vehicle production framing shows up across the industrial tape. If it is genuinely model-cycle and not end-demand, the recovery is dateable; if it is not, Nolato is running cost actions against a moving floor. Note the phrase model changes has never appeared in Nolato's top themes before this quarter — brand-new vocabulary for a brand-new excuse, and the market will want proof. The offset is real though. Because Materials carries an accretive margin and “it is fully organic. Unitron and Qualtech is not included at all in the Materials business” — Anders Bjorklund, President and CEO · 2026-10-29, mix alone is partially cushioning the automotive drag. The CFO quantified it cleanly: automotive and raw material pricing each accounted for roughly half of the negative gap in Engineered, with the Materials mix helping in the other direction.

What they stopped talking about — and one promise kept

Two absences stand out. First, there is essentially no tariff discussion — remarkable given that tariff refunds and trade-policy language saturate this quarter's global earnings flow, from packaging to distribution to auto parts. Nolato's US footprint is real, and its silence may simply be small exposure; either way it is not a lever they are pulling. Second, the phrases that filled the Q2 keyword set — new program, commercial volumes — have vanished from the narrative, absorbed into a generic ramp-up cost line. Against that, credit where due: the raw material lag was guided at roughly SEK 10m for Q3 and came in “very close to that number” — Per-Ola Holmström, CFO · 2026-10-29 by the CFO's own account, with no Q4 headwind assumed if conditions hold. After a year of oil-and-silver driven surprises in this cost line, a clean landing is worth noting. The lingering irritant is the group cost line, which two analysts have now pressed on in consecutive quarters. The CFO's answer was to guide an ongoing run-rate “somewhere in between the SEK 9 million and the SEK 15 million” — Per-Ola Holmström, CFO · 2026-10-29 per quarter — against SEK 9m in 2025. That is a step-up of roughly a third to two-thirds in unallocated overhead, driven partly by deal activity. It is small in absolute terms and, on a company that must prove a new CEO's M&A programme is worth the freight, exactly the sort of line that gets scrutinised every quarter until it stops jumping around. The bottom line: Nolato is mid-surgery. The growth engine is now a bespoke design-and-manufacture medical business being assembled through acquisitions; the old cyclical Engineered Solutions base is being pruned toward its highest-margin niche; and the flagship Hungary programme is currently a cost centre rather than a halo. Organic growth of 3% and a margin decline are not the story — the story is whether a first-time CEO can convert SEK 600m of purchased revenue into a multiple that no longer depends on one customer's model cycle.