Sales decrease for Nimbus Group as production changes in Finland
Nimbus Group (which produces and markets powerboat brands including Alukin, Aquador, Bella, and EdgeWater) says its sales have decreased by 20 per cent during the third quarter 2024. The business has tied up a lot of capital due to low demand, which has also had a negative impact on its cash flow.
“The weak market trend of recent years is the type that affects our industry periodically, which we have learned from our many years in the business,” says Jan-Erik Lindström president and CEO introducing the quarter’s results (the full report is online). “Another lesson we have learned during these periods is to adapt and prepare for the market when it rebounds, which always happens sooner or later.”
Thus a decision was made to reduce production capacity in Finland. Lindström says that management must be capable of taking decisive action. “That said, it is not done lightly, because it affects people’s daily lives.
“However, on the other end of the scales the daily lives of many more people are at stake, because no company can be successful in the long term if it is unable to adapt.
“When it comes to the operations in Finland, the numbers also speak for themselves and the weaker profitability of Nimbus Group in recent quarters is largely due to our Finnish operations. At present, operating loss (rolling twelve months) in the operations there amounts to approximately MSEK -40 in addition to the provision of MSEK 55, giving a total earnings effect of MSEK -95 during the same period.”
Lindström believes the effects of the planned change in Finland will be felt gradually and when fully implemented, the total earnings improvement is estimated to be about MSEK 50 annually (MSEK = Swedish Crowns in millions).
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“The various measures that we are now taking, including those in Finland, will lay the groundwork for better opportunities once the market turns around. There were some positive signs during the quarter that strengthened indications from the second quarter that a turnaround is imminent. During the quarter, for example, order intake rose 20 percent year-on-year, a sign that the market may have bottomed out.
“In terms of sales, the European market showed very weak growth and sales fell by a full 61 per cent in the third quarter. This decline is in line with the trend we have noted since last winter, albeit slightly deeper.”
He continues: “Operating cash flow was also weak during the quarter at MSEK -69 (-46), and was mainly impacted by lower operating liabilities. Weak earnings and cash flow naturally affect our liquidity and financial position, and the company’s management has therefore had a very strong focus on various measures to reduce our costs and increase cash flow.
“In this context, it should also be noted that some of the tied-up capital is, paradoxically enough, due to the favourable sales trend in the US, since most of the boats are produced in Europe and therefore tie up capital during the long transportation period. Here, the ongoing increase in local production of more boat models is important for reducing this effect.”
Bright spots for Nimbus Group’s future
Nimbus is keen to reiterate the framework agreement the group signed with the Swedish Defence Materiel Administration for the development and delivery of up to 100 work boats to the Swedish Armed Forces. “Work boats is an interesting segment because it offers opportunities for longterm supply agreements and with major customers in publicly funded operations such as defence, police and fire services,” says Lindström. “For natural reasons, this customer category is less sensitive to economic cycles and therefore offers an opportunity to balance fluctuations with the rest of the business.
“Yet another bright spot is the major interest we are seeing in Nimbus 495 Flybridge. During the quarter, the boat premiered at a boat show in Cannes and attracted significant interest. At the time of writing, we have sold ten 495s, a strong figure that further strengthens our belief in the great potential of this particular segment and of premium boats as we move forward.”
The Nimbus 495 Flybridge (main image above courtesy of Nimbus website) measures approximately 49 feet and is the largest boat launched by Nimbus Group to date. It’s said to be an ideal vessel for those who want to cover great distances and to be out at sea or in the archipelago for a long period of time.
“The Nimbus 495 Flybridge is a boat that has it all, and with its size and comfort it offers an extraordinary boating experience. The boat is aimed at customers in a smaller segment in terms of volume, but still plays a decisive role in the implementation of Nimbus Group’s stated growth strategy,” Lindström has previously said.
Additionally, production setup of Aquador 400 HT has been initiated. The boat will be launched at Boot Düsseldorf 2025. Sales are made through dealer networks and the largest markets are the Nordic region, Europe and the USA. During 2023, the group strengthened its position on the important North American market through the acquisition of the premium powerboat manufacturer EdgeWater Power Boats. In 2023, the group had sales of SEK 1,898 million and 511 employees. Operations are conducted in Sweden, Finland, Poland, England, Norway and the USA.
