Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sdiptech AB (FRA:938, Financial) has a strong geographical footprint in the Nordics, UK, and Italy, which supports its infrastructure-focused business model.
- The company has grown its profit by an average of 32% per year since 2017, indicating a strong historical performance.
- Sdiptech AB (FRA:938) is implementing strategic actions to restore organic growth and improve return on capital employed, showing proactive management.
- The company has a solid demand from its core portfolio, with many orders postponed to the second half of the year, suggesting potential future revenue.
- Sdiptech AB (FRA:938) has a strong acquisition pipeline and expects to welcome new companies in the second half of the year, which could drive future growth.
Negative Points
- Net sales decreased by 4% in the second quarter, with a 10% decrease in adjusted EBITDA, indicating a challenging financial performance.
- The company experienced a low cash flow generation of 45%, affected by inventory buildup and postponed orders.
- Sdiptech AB (FRA:938) is facing uncertainties in the market, leading to postponed customer orders and sales.
- The company is undergoing a strategic shift, which includes divesting companies that do not meet its criteria, potentially leading to a one-off goodwill revaluation of 400 to 500 million.
- There is a decrease in return on capital employed due to lower results and additional capital employed through acquisitions.
Q & A Highlights
Q: How confident are you that the second half of 2025 will be better, given the soft delivery in the last four quarters? Is this based on actual order intake or optimistic dialogues with customers?
A: We don't have exact evidence, but many companies have built up inventory and have talked to customers who foresee needing deliveries for ongoing projects. We are pretty sure this will happen as it's a chain of deliveries that needs to occur, and many projects have already started. – CEO Anders Matson
Q: Regarding the divestment of companies within other operations, what timeline should we expect? Will it happen in 2025 or later?
A: We are early in the process, having only talked to company leaders and started dialogues with potential buyers. It will not happen in 2025; it will take longer as we are careful about price and finding the best buyer. – CEO Anders Matson
Q: Will the companies within other operations require restructuring before divestment, similar to what was done with Meetus?
A: Some companies will undergo turnaround or improvement actions, but many are okay according to their business model. The divestment is due to a strategic shift, not poor performance. We expect a smoother process compared to Meetus. – CEO Anders Matson
Q: How will you report the new investments and other operations going forward? Will they be treated as a separate segment or discontinued operations?
A: We will report them as a separate segment, showing results and development of the core portfolio and other businesses as a whole, with proforma numbers for historical periods. – CFO Benkt Legstrom
Q: Can you elaborate on the strategic review and how you decided which companies to divest?
A: The decision is not based on poor performance but on a strategic focus on product-based companies. Many companies in the divestment group are service or installation-based, with low barriers to entry and hard to scale. We have been clear on which companies to include in this group. – CEO Anders Matson
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
