Release Date: July 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coor Service Management Holding AB (FRA:COE, Financial) reported an organic growth of 3% this quarter, indicating a positive trend.
- The EBITA margin improved to 5.2%, showing better profitability compared to previous quarters.
- Cash conversion improved significantly to 88%, up from 81% in the previous quarter.
- The company successfully extended important contracts, including a significant one with Volvo Cars in Sweden.
- Organizational changes aimed at improving operational efficiency have been completed, potentially enhancing future performance.
Negative Points
- The Danish market remains volatile with some operational inefficiencies, impacting overall stability.
- The company lost the Vlux contract in Denmark, which will affect revenues from Q4 onwards.
- Sweden and Denmark experienced lower variable volumes, contributing to negative organic growth in these regions.
- Restructuring costs amounted to 22 million, impacting the financial results for the quarter.
- Leverage increased to 2.9 due to dividend payouts, which could affect financial flexibility.
Q & A Highlights
Q: Can you discuss the long-term opportunities in Norway, especially with the public sector contracts?
A: The Norwegian market presents a significant opportunity, particularly in the public sector, which is largely untapped. If municipalities and regions in Norway start outsourcing like in Denmark and Sweden, it could be a major growth area. However, the exact market size is still uncertain. (Respondent: Unidentified_1)
Q: How might continued growth in Norway impact margins, especially with public sector contracts?
A: Public sector contracts typically have lower margins, but there is a trend towards quality-focused tender conditions, which could allow for better margins. However, we must ensure profitable growth, not just growth. (Respondent: Unidentified_1)
Q: Regarding the high maintenance volumes in Norway during Q2, when did they occur, and will they affect Q3?
A: The high maintenance volumes primarily occurred in the second half of Q2. There might be some carryover into Q3, but it will be limited as the maintenance is concluding soon. (Respondent: Unidentified_2)
Q: When does the Vlux contract in Denmark end, and how will it impact your numbers?
A: The Vlux contract ends towards the end of Q3, so its impact will be reflected from Q4 onwards. (Respondent: Unidentified_2)
Q: Are the restructuring costs expected to decrease after this quarter?
A: Yes, the restructuring related to the reorganization is now concluded, so these costs will decrease going forward. (Respondent: Unidentified_2)
Q: How do you view the stability and growth opportunities in your different country operations?
A: Norway is stable and predictable, Sweden is somewhat less predictable, and Denmark is currently the least predictable. The new Danish manager's primary task is to gain tighter control over costs and operations. (Respondent: Unidentified_1)
Q: What is the status of the share buyback program, and why was it postponed?
A: The share buyback program was postponed due to handling internal reorganization but will be revisited after summer. The target remains at 50 million by March next year. (Respondent: Unidentified_2)
Q: How has the Norwegian market's margin been affected by the above-normal growth, and would margins have expanded without it?
A: Even without the above-normal volume, there would have been some margin expansion due to a continued focus on operational efficiency. (Respondent: Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
