- Revenue: Exceeded SEK9.6 billion.
- Net Revenue Growth: Increased by 10%.
- Organic Growth: 3% for the quarter.
- EBITA Growth: Increased by 12%.
- EBITA Margin: Improved to 17.5%.
- Cash Flow: Increased by 23% from the previous year.
- Earnings Before Tax Growth: Increased by 14%.
- Profit After Tax Growth: Increased by 18%.
- Earnings Per Share: Increased to SEK5.14.
- Dividend Proposal: SEK2.2 per share.
- Acquisitions: 11 acquisitions completed, contributing 15% to net revenues.
- Electrify Division Revenue Growth: 20% increase, with 13% organic growth.
- Electrify Division EBITA Margin: 18.3%, up from 16% last year.
- Control Division Revenue Growth: 21% increase, with a 46% EBITA growth.
- Control Division EBITA Margin: Improved to 16%.
- TecSec Division Revenue Decline: 2% decrease, with a 5% organic decline.
- TecSec Division EBITA Margin: 16%, down from 18.2% last year.
- Niche Products Division Revenue Growth: 15% increase, with 1% organic growth.
- Niche Products Division EBITA Margin: 20%.
- International Division Revenue Decline: 2% decrease, with 3% organic growth.
- International Division EBITA Margin: Improved by 0.5 percentage points to 18%.
- Return on Equity: 28%, above the target of 25%.
- Earnings Per Share Growth: 19%, compared to the goal of 15%.
Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lagercrantz Group AB (FRA:LG72, Financial) reported a solid quarter with good earnings growth and revenue growth.
- The company achieved a 10% increase in net revenues, with acquisitions contributing 10% and organic growth at 3%.
- EBITA increased by 12%, with the EBITA margin improving to 17.5%.
- The Electrify division showed strong performance with a 20% revenue growth and an EBITA margin of 18.3%.
- The company completed 11 acquisitions in the past year, contributing to 15% of net revenues, demonstrating a strong M&A strategy.
Negative Points
- The TecSec division experienced a decline in revenues by 2% and an organic decline of 5%, affected by the weak construction sector.
- The construction-related business remains sluggish, impacting overall demand in certain segments.
- The International division posted a decline in revenues by 2%, affected by a 5% negative impact from foreign exchange.
- The company's exposure to the US market is limited, accounting for less than 4% of group sales, which may limit growth opportunities in that region.
- Geopolitical uncertainties are causing market hesitation, which could impact future business conditions and acquisition strategies.
Q & A Highlights
Q: What are your thoughts on doing acquisitions in the current market environment characterized by uncertainty?
A: Jorgen Wigh, CEO, stated that Lagercrantz Group continues to pursue acquisitions as usual, focusing on long-term investments without an exit horizon. The company remains observant of geopolitical situations but does not plan to adjust its strategy significantly, especially since many acquisitions target markets in Europe or Sweden, which are less affected by geopolitical tensions in North America.
Q: Was there a similar calendar effect on organic growth in Q1 compared to last year's Q1 due to the timing of Easter?
A: Jorgen Wigh, CEO, acknowledged a slight calendar effect on organic growth, with the previous quarter showing stronger growth partly due to this factor. However, he emphasized that the market is improving slowly, and the calendar effect should not be a major focus.
Q: Can you provide more color on the improvements in Epoke's business, given its stable sales but improved EBIT margin over the last decade?
A: Jorgen Wigh, CEO, explained that Epoke has undergone improvement programs and cost reductions, alongside better addressing the aftermarket, which has contributed to improved performance. These changes are seen as sustainable going forward.
Q: What is the outlook for organic growth in the Electrify division, given recent strong performance?
A: Jorgen Wigh, CEO, noted that while the Electrify division, particularly Elpress, has seen strong growth due to increased investments in electrical infrastructure, predicting future growth rates is challenging. However, he expects continued strong performance, albeit possibly not at the same high levels.
Q: How do tariffs on copper prices impact Elpress, considering its significant use of copper products?
A: Jorgen Wigh, CEO, mentioned that Elpress's exposure to the US market is limited, and some products were initially exempt from tariffs. Therefore, there has been no significant impact on demand or profitability from tariffs so far.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
