Q1 2025 Meko AB Earnings Call Transcript
Key Points
- MEKO AB (LTS:0HDJ) achieved a total growth of 6% in Q1 2025, despite a cautious market environment.
- The company successfully defended its gross margin through price adjustments and improved procurement strategies.
- MEKO AB (LTS:0HDJ) is accelerating efforts in the tire segment, aiming to increase tire sales by over 30% within two years, supported by a strategic partnership with Goodyear.
- The company is expanding its presence in the commercial vehicle sector with a new division, aiming to replicate its leading position in passenger cars.
- MEKO AB (LTS:0HDJ) is advancing its high-tech warehouse projects, which are expected to enhance logistics efficiency and open new growth opportunities.
- Organic growth was slightly negative, indicating challenges in achieving growth without external factors.
- The Finnish market underperformed due to a slower-than-expected economic environment and a warm winter affecting sales.
- The company is experiencing increased costs related to warehouse projects, including double rents during the transition period.
- There is a seasonal weakness in operating cash flow in Q1, exacerbated by increased non-inventory working capital components.
- Currency fluctuations, particularly the weaker Norwegian krone, offset some of the benefits gained from a stronger Swedish krona against the euro.
Thank you. Good morning, everyone, and welcome to Meko's presentation of our results for the first-quarter 2025. I said, I'm here with the CFO, Christer Johansson, and together we'll walk you through our performance and current position.
Unlike many other industries, we see stable underlying demand driven by the constant need to service and repair vehicles. The car remains an essential part of the daily life for most people, and when repairs are needed, they tend to prioritize them.
Merkel's aim is to meet this need. We want to be the most comprehensive partner for all who drive, repair, and maintain vehicles in Northern Europe, and today we are the market leader. However, we're not entirely unaffected by international turbulence. In Q1, our markets was cautious with concerns about a prolonged economic downturn. Total growth was 6% and the or organic growth was slightly negative.
Despite this, we managed to defend our gross margin through price adjustments and improved procurement. We also managed to improve our EBIT
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