Release Date: July 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Indutrade AB (IDDWF, Financial) reported a stable order intake, with half of the companies experiencing organic growth, particularly in the energy sector.
- The company completed four acquisitions in 2025, contributing positively to the overall performance and maintaining a strong acquisition pipeline.
- The EBITA margin improved sequentially from 13.3% in Q1 to 13.7% in Q2, indicating effective cost management.
- The gross margin remained stable and high at 35.3%, reflecting consistent profitability.
- Indutrade AB (IDDWF) maintained a strong financial position with a net debt/EBITDA ratio of 1.5 times, down from 1.7 times last year, providing a solid foundation for future growth.
Negative Points
- Net sales decreased by 4% both in total and organically, primarily due to currency headwinds and a lower order backlog.
- The EBITA decreased by 11% compared to the previous year, driven by a 4% organic sales decline.
- Sales in key markets such as Denmark, Finland, and Norway were down year-over-year, impacting overall performance.
- The company faced challenges in the Infrastructure and Construction, General Engineering, and Process industry sectors, with weaker demand reported.
- Operational cash flow was down during the quarter due to less favorable working capital movements and lower results.
Q & A Highlights
Q: Could you explain the decision to pause M&A discussions due to the soft macro environment? Is it all discussions paused, or just certain exposures?
A: CEO Bo Annvik clarified that "pause" might be the wrong term. They are prolonging discussions to better understand the pace and momentum of the companies involved. This ensures that when they take ownership, they don't face declining performance initially. The discussions are ongoing, and they expect to finalize several projects in the second half of the year.
Q: How is the organic cost development progressing, and what can we expect in Q3?
A: CFO Patrik Johnson noted that costs are coming down, with sequential decreases from Q1 and flat compared to last year. They expect this trend to continue, potentially reaching negative territory. Some one-offs related to layoffs affected Q2, but excluding these, costs would have been slightly lower than last year.
Q: Can you provide insights into the order backlog at the end of Q2 compared to last year?
A: CFO Patrik Johnson mentioned that while it's challenging to have precise transparency due to the number of companies and spread over time, the backlog is almost restored to last year's levels. This indicates that sales levels should pick up in Q3 and Q4, although it varies by business area.
Q: What happened in the Infrastructure and Construction segment, given the negative organic growth?
A: CEO Bo Annvik explained that the segment had a cluster of companies with weak performance, leading to divestments. They are working on improving expense levels, and once top-line growth improves, profitability should follow. CFO Patrik Johnson added that one-offs and divestitures impacted the segment, totaling around SEK10 million.
Q: How are the Technology and Systems Solutions (TSS) and Process, Energy, and Water (PEW) divisions performing?
A: CEO Bo Annvik stated that TSS is more international, impacted by tariff uncertainties and CapEx hesitations, but showed order intake growth. PEW is more Northern Europe-focused with a strong underlying situation, expected to perform well in Q3 and Q4.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
