Hanza Q1 2025 presentation: Record sales and margins as acquisition strategy pays off

Introduction & Market Context

Hanza AB (HANZA) shares surged 10.43% on May 6, 2025, following the company’s Q1 2025 presentation that highlighted record sales and improved margins. The manufacturing solutions provider reported strong quarterly results amid a global shift from globalization to regionalization in supply chains.

The company emphasized how recent global events have accelerated the need for localized manufacturing solutions, positioning Hanza’s business model favorably in the current market environment.

As shown in the following slide highlighting global supply chain challenges:

CEO Erik Stenfors and CFO Lars Åkerblom presented Hanza’s strategy of offering complete, local manufacturing solutions across its network of 25 factories with approximately 3,200 employees. The company’s regional manufacturing clusters in Europe, complemented by a gateway in China, provide a competitive advantage in the current market landscape characterized by trade barriers and supply chain disruptions.

The following image illustrates Hanza’s global manufacturing footprint:

Quarterly Performance Highlights

Hanza reported record Q1 2025 sales of 1,326 MSEK, representing a 6% increase year-over-year. The growth was primarily driven by the acquisition of Leden, completed on March 2nd. On a pro forma basis, including Leden, sales amounted to 1,535 MSEK for the quarter.

The company’s adjusted operating profit reached a record 97 MSEK, with the adjusted operating margin improving to 7.3% from 7.1% in Q4 2024 and 5.3% in Q1 2024. Adjusted earnings per share increased to 1.14 SEK from 0.68 SEK in the same period last year.

The following financial performance chart demonstrates the company’s sales and earnings trajectory:

Operating cash flow strengthened to 68 MSEK, up from 31 MSEK in the comparable period, highlighting Hanza’s consistent cash generation capabilities despite rapid expansion. The company’s net debt increased to 1,197 MSEK primarily due to the Leden acquisition, with the net debt to EBITDA ratio at 2.3, remaining below the financial target of 2.5x.

The cash flow and debt position are illustrated in the following chart:

Strategic Initiatives & Acquisitions

The Leden acquisition represents a significant milestone in Hanza’s expansion strategy. The integration is progressing as planned, with Leden reporting a 7.2% operating margin in March, its first month as part of Hanza. The acquisition has expanded Hanza’s customer base to include companies like Eaton (NYSE:ETN), Danfoss, and ABB (ST:ABB) Finland.

The following slide details the Leden acquisition and integration progress:

In addition to the Leden acquisition, Hanza inaugurated a new Swedish factory on February 11th, improving production flow. The company also launched a new market program called "Lynx," targeting sectors such as defense, energy, and security, with a special emphasis on supply chain solutions for Germany.

As the company completes its "HANZA 2025" strategy, management is already preparing for "HANZA 2028," focusing on the next operational and financial milestone. This structured expansion approach has supported consistent growth, with first-quarter sales increasing from 500 MSEK in 2021 to 1,300 MSEK (pro forma) in 2025.

Segment Performance

Hanza’s segment performance showed mixed results. The Main Markets segment reported a 2% increase in net sales to 787 MSEK, though sales were down 6% when adjusted for acquisitions and currency effects. The segment’s adjusted operating profit totaled 74 MSEK, corresponding to an operating margin of 9.4%, up from 7.0% in the previous year.

The Other Markets segment saw an 11% increase in net sales to 535 MSEK, with a 2% increase when adjusted for acquisitions and currency. The segment’s adjusted operating profit reached 26 MSEK, with an operating margin of 4.9%, improved from 3.3% in the comparable period.

The company noted that volume decreases in Germany affected both sales and margins negatively, while MIG™ (Manufacturing Integration Guide) projects contributed positively to sales and margins in the Other Markets segment.

Financial Position & Outlook

Despite the increased debt from the Leden acquisition, Hanza maintains a solid financial position with an equity ratio of 34%. The company expects a gradual reduction in its debt ratio as it integrates Leden and realizes synergies.

Hanza has proposed a dividend of 0.80 SEK per share (down from 1.20 SEK), corresponding to 35 MSEK total distribution. The Annual General Meeting is scheduled for May 13, 2025.

The company’s sustainability initiatives continue to progress, with EcoVadis assessments expanded to all Swedish factories, three of which reached Silver level. Hanza also received a gold rating for its cybersecurity performance following ISO 27001 standards.

As illustrated in the following conclusions and outlook slide, Hanza is focused on completing its 2025 strategy while preparing for the next phase:

With a strong Q1 performance and strategic positioning in the shifting manufacturing landscape, Hanza appears well-positioned to capitalize on the trend toward regionalized supply chains. The market’s positive reaction, with the stock price increasing by 10.43% to 72.9 SEK on the day of the presentation, suggests investor confidence in the company’s strategy and execution.

Full presentation:

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