Release Date: July 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ratos AB (FRA:RAZB, Financial) reported an increase in EBITA margins by 3.5%, indicating improved profitability.
- The company achieved organic growth despite operating in a subdued and uncertain market.
- Ratos AB (FRA:RAZB) maintains a strong financial position with a 40% stake in Sentia valued at approximately SEK2.5 billion.
- Plantasjen showed improved profitability and stability following financial restructuring.
- The company has a robust order backlog, particularly in the Construction & Services segment, indicating future revenue potential.
Negative Points
- Sales were down due to the closure of unprofitable stores in Plantasjen and Expin Group, impacting overall revenue.
- Industrial Services experienced a decline in sales due to negative calendar effects and a slow biotech market.
- The Consumer segment, particularly Plantasjen, faced challenges due to adverse weather conditions affecting sales.
- The company's exposure to currency fluctuations, particularly with the Norwegian krone, negatively impacted financial results.
- The divestment of airteam and listing of Sentia led to a higher reported leverage ratio, indicating increased financial risk.
Q & A Highlights
Q: Can you quantify how much of the decline in Industrial Services is due to calendar effects versus a weaker market? Also, how much did cost synergies in Knightec offset this decline?
A: The calendar effects accounted for roughly SEK10 million to SEK11 million, impacting both the bottom and top lines. The subdued market also affected TFS due to a slow biotech market. Additionally, there was a negative geographical mix with significant business from Brazil.
Q: What are your expectations for the market in the Industrial Services segment, particularly for consultants like Knightec?
A: We expect the market in Q3 to be similar to Q2. June showed some improvement with new projects for Knightec, but the environment remains uncertain. The integration of Semcon and Knightec is crucial for creating synergies and strengthening our position in a weaker market.
Q: How do you plan to progress with your streamlining strategy in H2, and how do you decide between divestment and IPO for subsidiaries?
A: We aim to divest the Consumer segment, but we will communicate actions only after they are completed. The decision between divestment and IPO depends on the situation, but we focus on strengthening our core areas.
Q: Given Plantasjen's performance in Q2, do you expect to achieve a mid-single-digit margin for the full year?
A: Achieving a mid-single-digit margin is our goal, but external factors like weather can impact results. We are confident due to the operational improvements and cost savings achieved.
Q: With the divestment of Sentia and airteam, how should we view your remaining construction exposure?
A: We have no remaining construction exposure beyond our stake in Sentia.
Q: Regarding capital allocation, what are your priorities between M&A, buybacks, or dividends?
A: All options are on the table. We aim to create shareholder value through strategic capital allocation, including potential bolt-on acquisitions with operational synergies.
Q: How much of the 1% organic growth is attributable to price versus volume?
A: The majority of the organic growth is attributable to volume rather than price.
Q: The minorities were larger than expected. Is this due to the divestments in the quarter?
A: The larger minorities are partly due to the divestments, particularly Sentia. Over time, minorities should be around 10% to 12%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
