Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nilfisk Holding AS (FRA:NF1, Financial) reported strong organic revenue growth in the consumer and specialty segments, with increases of 12.9% and 11.7% respectively.
- The company achieved a gross margin improvement for the fifth consecutive quarter, driven by diligent price and discount management and a favorable product mix.
- EMEA region delivered a robust organic growth of 7.9%, supported by effective commercial execution and expanded sales and service coverage.
- Nilfisk has a flexible and robust supply chain with production facilities in North America, Europe, and Asia Pacific, allowing it to mitigate tariff impacts effectively.
- The company is implementing a decentralized operating model to enhance its competitive position and optimize resource allocation closer to customers.
Negative Points
- Nilfisk reported a negative organic growth of 1.2% for the first quarter of 2025, primarily due to weak performance in the Americas.
- The service segment experienced a slight decline of 1.5%, impacted by challenges in the Americas within pack and field service.
- EBITDA margin before special items decreased by 1 percentage point compared to the previous year, affected by increased overhead costs.
- Cash flow from operating activities was negative by EUR12.5 million, driven by increased working capital and lower operating profits.
- The Americas region saw a significant decline of 17.7% in organic growth, attributed to a high backlog release in the previous year and reduced production capacity in the US high-pressure washer business.
Q & A Highlights
Q: Could you comment on the impact of last year's backlog release in the Americas and how it affects 2025?
A: The largest backlog release was in the first quarter, and it will gradually decrease throughout the year, becoming very limited by year-end. We are not providing specific numbers at this stage. - Jon Sintorn, CEO
Q: Can you provide details on the cost reduction program and its expected impact?
A: We plan to reduce the run rate by 6% to 8% in the second half of the year compared to current levels. This will result in a full-year impact in 2026. - Carl Bandhold, CFO
Q: What assumptions are included in the 2025 guidance for the US market?
A: We anticipate flat sales and revenue in the Americas compared to last year, with improved order intake and a stronger second half of the year. The guidance assumes a neutral development in the US, not accounting for backlog headwinds. - Jon Sintorn, CEO
Q: How much of EMEA's growth was driven by new products versus existing channels?
A: New products contributed a little less than half of the growth in EMEA for the first quarter. The remaining growth was driven by strong customer relationships and service. - Carl Bandhold, CFO
Q: How is Nilfisk mitigating the impact of tariffs, and what has been the effect so far?
A: The direct financial impact of tariffs has been limited. We have adjusted our supply chain and inventory to mitigate effects, and we are confident in our ability to offset tariffs through supply chain flexibility and moderate price increases. - Jon Sintorn, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
