Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fagerhult Group AB (FRA:2F0, Financial) successfully resolved an IT incident at their Whitecroft business in the UK, restoring full operational capacity by June.
- The company reported improvements in gross margins and a reduction in selling and administration expenses by 7% to SEK629 million.
- High M&A activity was noted, with the closing of Trato and the signing of Capelon, both aligning well with the company's strategy and bringing strong customer relationships.
- The order backlog increased by SEK316 million since the start of the year, driven by projects like KSP in Saudi Arabia and contributions from iGuzzini, Fagerhult, and Whitecroft.
- The Premium business area remains the most profitable and stable, contributing to 35% of the group's revenue with a focus on high-quality lighting solutions in Western Europe.
Negative Points
- Fagerhult Group AB (FRA:2F0) experienced a 6.5% organic decline in order intake for the second quarter, reflecting ongoing market volatility.
- Net sales for the group declined by 10.7% when adjusting for currency effects, with a significant financial impact from the IT incident in May.
- The operating results were deemed unsatisfactory, with the current activity levels unable to support a double-digit operating margin.
- Currency headwinds negatively impacted order intake and net sales, averaging SEK31 million per month in the second quarter.
- The Professional and Infrastructure business areas faced challenges, with Professional impacted by the IT incident and Infrastructure needing to improve order intake conversion.
Q & A Highlights
Q: How do you view the second half of the year in terms of growth given the market volatility?
A: Bodil Sonesson, President and CEO, stated that while no drastic market changes are expected, a gradual improvement is anticipated. The company has a higher backlog than in the first half, which should positively impact results. Additionally, the integration of Trato is expected to contribute positively in the third quarter.
Q: When do you expect the closing of the Capelon acquisition?
A: Bodil Sonesson mentioned that the closing is expected to be quick, likely occurring after the holidays in early August, given that the acquisition is in Sweden, which facilitates a faster process.
Q: Can you provide insights on when improvements are expected in the Professional and Infrastructure business areas?
A: Michael Wood, CFO, explained that for the Professional area, an improved second half is anticipated due to a 5% growth in order intake and a significant increase in order backlog. For Infrastructure, particularly Veko, the focus is on improving conversion rates of opportunities, with potential improvements expected towards the end of Q3 into Q4.
Q: What are the expansion plans for Capelon beyond Sweden?
A: Bodil Sonesson noted that Capelon already has customers in Finland, Norway, and the Netherlands, demonstrating the technology's effectiveness outside Sweden. Fagerhult plans to leverage its global sales network to accelerate Capelon's international expansion.
Q: What are the key strategic focuses moving forward?
A: Bodil Sonesson emphasized the focus on growing within smart outdoor lighting to create a more connected environment with customers. The company is also concentrating on cost reduction and increasing order intake across all brands.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
