Release Date: July 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dustin Group AB (STU:9DG, Financial) achieved an organic sales growth of 2.9% in Q3, with stabilization observed in the SMB market.
- The company successfully completed a rights issue, reducing leverage from 6.0% to 4.3%, which strengthens its financial position.
- Cost efficiency measures have been effective, with SGA expenses decreasing by 14% and a reduction of 150 full-time employees, contributing to improved cost structure.
- The strategic decision to exit the consumer market and focus on B2B is expected to enhance strategic focus and operational efficiency.
- Standardization of services in the Nordics has shown clear margin support, with plans to extend this initiative to other regions for further benefits.
Negative Points
- Gross profit decreased to SEK680 million from SEK821 million last year, primarily due to lower gross margins.
- Adjusted EBITA fell to SEK72 million from SEK130 million, with a reduced EBITA margin of 1.4% compared to 2.4% last year.
- The Netherlands market faced significant challenges, with price competition leading to a 20% year-over-year sales drop.
- Cash flow from operating activities decreased significantly to SEK139 million from SEK454 million last year, impacted by increased inventory and delayed payments.
- The Benelux region experienced a negative margin effect of 1.7%, driven by low-margin new contracts and price competition in the Netherlands.
Q & A Highlights
Q: On the agreement and lower profitability in the Netherlands, are these entirely new contracts, or are they contracts being renewed with lower pricing points?
A: Johan Karlsson, CEO: They are a combination of new and renewed contracts, primarily linked to frame agreements with mini tenders. The market's small volumes have led to high price competition.
Q: Do you see any gap from the refresh cycle on the LCP side, and when might this trend pick up?
A: Johan Karlsson, CEO: We see signs of renewal, but market uncertainty blurs the picture. Some customers are delaying investments, but we expect increased activity from Microsoft and PC vendors to drive changes.
Q: Are there any temporary headwinds for margins due to Microsoft license agreements renewal?
A: Johan Karlsson, CEO: While we lose on enterprise agreements, moving to cloud-based licenses offers better compensation. It's a trade-off, but overall, we expect it to be relatively neutral in the coming quarters.
Q: What is driving the 10% year-over-year increase in Swedish sales in Q3?
A: Julia Lagerqvist, CFO: The main driver is activities within the defense sector on the public side, although there are positive signs in larger SMB segments as well.
Q: What is your turnaround plan for the Dutch market, and are you considering structural changes in Benelux?
A: Johan Karlsson, CEO: We are building the SMB online business in the Netherlands and adding value through product life cycle services. In Belgium, we aim to grow market share through public tenders, improving the overall Benelux situation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
