VBG sales rise 5.8% in third quarter to SEK 1,447.2 million
Key Facts
VBG Group’s sales rose 5.8% year on year to SEK 1,447.2 million in the third quarter of 2026, but operating profit fell to SEK 139.6 million from SEK 158.3 million, and its margin declined to 9.6% from 11.6%, according to the group’s interim report. Organic growth was 5.4%, compared with 6.3% in the year-earlier period, excluding the effects of acquisitions and currencies. By contrast, order bookings increased 4.5%, and cash flow from operating activities jumped to SEK 265 million from SEK 136 million. Profit after financial items also rose to SEK 131.9 million from SEK 139.5 million, while earnings per share increased to SEK 4.16 from SEK 3.87. The figures reflect broader sales and orders alongside cost pressure on operating profitability, despite improved cash flow and earnings per share.
Revenue growth extended through the first nine months of the year, with reported sales rising 5.4% to SEK 4,304.1 million from SEK 4,081.7 million, while organic growth reached 6.4%, following a 4.4% contraction in the same period a year earlier. However, operating profit for the period fell to SEK 436.9 million from SEK 491.2 million, and its margin declined to 10.2% from 12.0%. The results were affected by provisions of SEK 19.3 million for restructuring linked to the consolidation of production operations in Dobšany, Czech Republic, as well as workforce reorganisation costs of SEK 6.8 million in the Mobile Thermal Solutions division. Thus, annual growth in organic sales coincided with a decline in operating profit, while reorganisation items added direct costs to the period’s results. In the third quarter of 2025, the group recorded sales growth of 7.5% to SEK 1,367.9 million, with organic growth of 6.3%, putting the slowdown in reported growth in the current quarter in the context of the previous year’s performance.
The group said tariffs and higher costs for raw materials, energy and freight weighed on results, and that the impact of price adjustments lagged cost increases. The report added that the group continued price adjustments, operational improvements and cost-control measures during the quarter to address these pressures. In the Mobile Thermal Solutions division, workforce reorganisation costs amounted to SEK 4.7 million during the quarter, alongside higher raw-material and freight costs and increased tariffs. The company said implemented price adjustments do not immediately offset increases because of a time lag between cost changes and the effect of pricing. These pressures provide context for the decline in the operating margin during the quarter, despite sales growth across the three business activities and geographic markets identified in the report: North America, Europe and the rest of the world. Management also identified developing operating capacity, improving processes, controlling costs and capitalising on order bookings as areas of focus amid what it described as a business environment marked by geopolitical and macroeconomic uncertainty.
All three of the group’s divisions recorded sales growth, but the drivers differed. Sales of Truck and Trailer Equipment rose 2.8%, mainly driven by continued strong demand in the defence sector, alongside positive demand for trailers in Europe. Sales at Mobile Thermal Solutions increased 8.3%, supported by strong demand for off-road vehicles and improved performance in European markets. Power Transmission’s Ringfeder division lifted sales 3.3% and recorded its strongest quarter ever in terms of sales. The group said the product mix and high activity levels in the latter division created capacity challenges that affected efficiency and earnings during the quarter. A comparison with 2025 shows a shift in conditions in some markets: the group said sales fell 3.3% last year despite organic growth of 2.4%, due to continued weak demand for trailers in Europe and a weak off-road products market in the first half of the year. This background places the divisions’ growth in the current quarter against markets that faced varying pressures during the previous year.
The group is investing to expand its production capacity. It said the Mobile Thermal Solutions facility in Toronto remains on track to reach full production capacity in the second quarter of 2027. The new Ringfeder facility in Dobšany is scheduled to begin operations in the third quarter of 2027. The dates follow capacity challenges that affected Ringfeder’s efficiency, while the group faces rising input costs and delayed pricing effects. In the long term, the group targets average annual sales growth of at least 10% over five years, alongside an operating EBITA margin above 15%. In the first nine months of 2026, the reported operating margin was 10.2%, a measure of operating EBIT rather than the targeted EBITA margin, so the two figures use different measures. The annual report for the period from January to December 2026 will be published on 17 February 2027, according to the investor calendar.
The group held an online presentation and investor call on 27 October 2026 at 15:30 Central European Time to present and discuss the report, with the group’s chief executive and chief financial officer participating. VBG’s operations comprise three divisions: Truck and Trailer Equipment, Mobile Thermal Solutions and Power Transmission’s Ringfeder. Its Class B share is listed on Nasdaq Stockholm in the Mid Cap segment. Management said it is monitoring developments in the business environment and focusing on price adjustments, cost control, capacity development, operational improvements and capitalising on order bookings. These priorities identify the operational issues the company is monitoring after operating profit declined in the quarter and the first nine months, as its new facilities prepare to increase production during 2027. The scheduled operating dates for the two facilities remain part of the expansion plans outlined in the report, while the next financial report is due in February 2027.