Release Date: July 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Addnode Group AB (STU:AR7, Financial) reported a significant improvement in EBITA, increasing to SEK238 million from SEK162 million the previous year, with the EBITA margin rising to 16% from 8%.
- The Design Management division saw a strong improvement in EBITDA, increasing by 99% to SEK171 million, with a margin increase to 25.6% from 7.1% last year.
- The company completed three new acquisitions, including Genus in Norway and two asset deals in the US, which are expected to strengthen their market position.
- The Process Management division delivered strong growth, with net sales increasing by 5% and EBITDA by 10%, marking the fourth consecutive quarter of improved EBITDA margins.
- Addnode Group AB (STU:AR7) maintains a resilient balance sheet, with a cash position of approximately SEK730 million and a significant portion of its revolving credit facilities remaining unutilized.
Negative Points
- The German market remains challenging, impacting the Product Lifecycle Management (PLM) division, which saw a decrease in EBITDA to SEK33 million and a narrowed EBITDA margin of 7.4%.
- A stronger SEK had a negative foreign exchange impact of approximately SEK17 million on EBITDA for the quarter.
- Cash flow from operating activities decreased significantly to SEK33 million from SEK178 million the previous year, mainly due to changes in working capital related to the Design Management division.
- The transition to Autodesk's new transaction model and reclassification of third-party agreements negatively impacted reported net sales figures.
- The economic and geopolitical situation remains uncertain, affecting customers' decision-making processes for major investments, particularly in the German market.
Q & A Highlights
Q: Regarding the recent acquisitions in the Design Management division, are these a result of the new transaction model or a strategic shift?
A: Johan Andersson, CEO, explained that while asset deals are not new, the recent acquisitions in the US were driven by a strong market position and favorable discussions with partners. The changes in the transaction model may have influenced these decisions, but it's a mix of factors.
Q: Can you explain the SEK31 million in eliminations at the EBITDA level?
A: Kristina Mackintosh, CFO, noted that this includes transaction costs and investments in employees, with a normal run rate of about SEK2 million to SEK3 million.
Q: What caused the SEK16 million negative currency impact on EBITDA this quarter?
A: Kristina Mackintosh, CFO, attributed this to the weakened dollar and some impact from the pound and euro. This was more material this quarter, hence its inclusion in the report.
Q: Where are you seeing project delays due to the uncertain macro environment?
A: Johan Andersson, CEO, mentioned that while customer numbers are growing, investment decisions are cautious, particularly in Germany. The German market remains challenging, impacting larger projects.
Q: Can you provide details on the profitability and multiples of the recent carve-out acquisitions?
A: Johan Andersson, CEO, stated that the two acquisitions have a combined net sales run rate of SEK52 million, with costs primarily related to 14 employees. The acquisitions are expected to positively impact results.
Q: Are there plans for more restructuring charges in the PLM division?
A: Johan Andersson, CEO, confirmed that no additional restructuring charges are planned for the second half of the year. The full run rate of savings is expected in Q4, with some benefits materializing in 2026.
Q: What is driving the strong growth in the Design Management division?
A: Johan Andersson, CEO, highlighted underlying growth in the US market and contributions from companies like Tribia. Even after adjusting for early renewals, the division is experiencing growth.
Q: How do you view the medium-term growth potential for Process Management?
A: Johan Andersson, CEO, sees potential for 5% annual growth, driven by strong positions in markets like Norway. There are opportunities to expand beyond the Nordic public sector, particularly in geographic information systems.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
