Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Storskogen Group AB (LTS:0AA9, Financial) reported a strong cash conversion rate of 88%, exceeding their target.
- The company achieved positive organic EBITDA growth in both trade and services, alongside margin improvements.
- Storskogen Group AB (LTS:0AA9) maintained a healthy leverage ratio of 2.3 times EBITDA, the lowest since Q1 2022.
- The company completed a small add-on acquisition, enhancing its automation business, Danmatic.
- Storskogen Group AB (LTS:0AA9) has a strong cash flow, supporting future acquisitions and long-term growth plans.
Negative Points
- Sales decreased by 5% compared to the same period last year, primarily due to divestments.
- The industry segment experienced a slow start to the year with a 9% decrease in adjusted EBITA.
- The infrastructure vertical within services faced challenges due to seasonality and exposure to the construction industry.
- The company reported a negative cash flow of SEK777 million for the period.
- High concentration of sales in Sweden and cyclical sectors poses a risk if the economy does not rebound as expected.
Q & A Highlights
Q: Can you explain the slow start in the Industry segment and the impact of postponed projects?
A: Christer Hansson, CEO, explained that the slow start in Q1 was due to delays in high-margin companies within automation and industrial technologies. However, they expect to return to last year's earnings levels in Q2 with the postponed projects.
Q: Is the sales contraction in the Industry segment primarily in the US, and how does it affect your outlook?
A: Christer Hansson noted that the slowdown is not limited to the US but is temporary across several business units. They have seen improvements in March and continued positive order intake into April.
Q: With recent bolt-on acquisitions, is Storskogen ready to restart its M&A agenda?
A: Christer Hansson confirmed that with a stable leverage ratio, they are actively looking at acquisition opportunities, starting with add-ons and potentially platform acquisitions later in the year.
Q: Are the recent acquisitions aligned with your high-margin strategy discussed at the Capital Markets Day?
A: Christer Hansson and Lena Glader, CFO, affirmed that recent acquisitions are high-margin businesses, with synergies expected to enhance profitability further.
Q: What improvements are you seeing in the Services segment, particularly in infrastructure services?
A: Christer Hansson stated that both order intake and quotations have improved, indicating a better market situation moving forward, with a mix of small and large projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
