Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nederman Holding AB (FRA:5QR, Financial) reported strong order intake in three out of four divisions, with two divisions achieving record quarters.
- The company finalized the acquisition of Euro-Equip, strengthening its position in the foundry and metal recycling markets.
- The extraction and filtration technology division saw its strongest ever orders received, particularly in America.
- Duct & Filter Technology division experienced sharply improved sales and strong profitability, with a 19% increase in order intake.
- Monitoring and control technology division achieved a new record order intake for a single quarter, with profitability clearly up versus Q1 last year.
Negative Points
- Overall EBITDA was down by SEK31 million compared to the previous year, impacted by currency fluctuations and acquisition expenses.
- The process technology division experienced a significant decline in order intake, down nearly 30% currency neutral compared to Q1 2024.
- Cash flow from operations was significantly lower than the previous year, primarily due to reduced order intake in process technology.
- Net debt increased by approximately SEK130 million, influenced by recent acquisitions including Euro-Equip.
- Political uncertainty and tariffs are expected to negatively affect order intake in the coming quarters, creating a volatile market environment.
Q & A Highlights
Q: As you mentioned in the report, it is expected that the growing political uncertainty will have a negative effect on order intake in the coming quarters. Can you comment on the current trend or activity levels at the end of Q1 and the beginning of Q2?
A: Sven Kristensson, CEO: The quarter started slow with turmoil in February but saw a good bounce back in March. Order intake remains volatile. While some divisions like MCT and duct and filter are performing well, others like PT have suffered due to delays in large projects. We maintain price discipline and expect a rebound later, though the next two quarters may be volatile due to ongoing uncertainties.
Q: In the extraction and filtration division, profitability was dampened by fewer medium-sized orders. Is this a trend you expect to continue?
A: Matthew Cusick, CFO: The division grew its backlog by approximately SEK50 million in the quarter. While medium-sized orders were lacking, the strong order intake this quarter should boost factory utilization and profitability going forward. We expect a bounce back in profitability, contingent on continued order intake.
Q: Could you provide more details on your offerings to the data center industry and whether this is a growing sector for you?
A: Sven Kristensson, CEO: We have niche products for the data center industry, but it's not a major growth area for us. Our focus is more on battery manufacturing, where Asian suppliers have not met regulations. We are also expanding into new areas like food mixing stations and chemistry, using the same products in different applications.
Q: How has the acquisition of Euro-Equip impacted your operations and market presence?
A: Sven Kristensson, CEO: The acquisition strengthens our position in the foundry and metal recycling markets, particularly in hot air applications. It provides us with a sales and support structure in the Iberian Peninsula and parts of Latin America, enhancing our market presence.
Q: What are the key financial impacts from the recent acquisitions and currency fluctuations?
A: Matthew Cusick, CFO: The acquisition of Euro-Equip and others has increased net debt by approximately SEK130 million. Currency fluctuations, particularly the strengthening SEK and depreciating US dollar, impacted comparability by about SEK20 million. Despite these challenges, we maintain a positive outlook due to strong order intake and backlog.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
