Indutrade Q2 2025 slides: Sales decline pressures margins despite acquisition growth

Introduction & Market Context

Indutrade AB (STO:INDT) presented its second quarter 2025 results on July 15, revealing continued challenges as the industrial conglomerate navigates market uncertainty. The company’s stock fell 5.02% following the presentation, closing at 250.0 SEK, down from the previous close of 263.2 SEK, as investors reacted to declining sales and compressed margins.

The Q2 results extend a pattern of underperformance seen in Q1 2025, when Indutrade also missed analyst expectations for both EPS and revenue. This quarter’s presentation highlighted the company’s efforts to maintain profitability through cost control and strategic acquisitions despite headwinds across all business segments.

Quarterly Performance Highlights

Indutrade reported net sales of 8.1 billion SEK for Q2 2025, representing a 4% decrease compared to the same period last year. The decline was primarily organic (-4%), with a negative currency effect (-3%) partially offset by contributions from acquisitions (+3%).

As shown in the following chart of order intake and net sales trends:

While order intake remained stable (organically unchanged), the company’s EBITA (earnings before interest, taxes, and amortization) fell to 1,115 million SEK, an 11% decrease from Q2 2024. The EBITA margin contracted to 13.7%, down from 14.8% in the comparable period.

Earnings per share decreased by 12% to SEK 1.75 (from SEK 2.00), reflecting the challenging operating environment. Management attributed the performance to fewer working days, market uncertainty, and challenging year-over-year comparisons.

The comprehensive financial summary reveals the extent of the pressure across key metrics:

Segment Performance

All of Indutrade’s business areas experienced negative organic sales development in Q2 2025. The Technology & Systems Solutions segment was hardest hit with a 6% organic decline, while Life Science showed the most resilience with only a 2% organic decrease.

The following breakdown illustrates the sales performance across business segments:

EBITA margins declined across all business areas, with organic sales development cited as the main driver. However, management noted that EBITA margins sequentially improved in four out of five business areas compared to Q1 2025, suggesting some stabilization.

The margin development by business area shows varying levels of profitability:

Geographically, performance was mixed across regions. The company maintained a stable gross margin of 35.3% (compared to 35.4% in Q2 2024), indicating that pricing power remains intact despite volume challenges.

Acquisition Strategy

Despite the challenging operating environment, Indutrade continued to execute its acquisition strategy, completing four acquisitions so far in 2025 with combined annual sales of 425 million SEK. These acquisitions span multiple countries and business areas, reinforcing the company’s diversification approach.

The details of the 2025 acquisitions are outlined below:

Management emphasized a "very strong acquisition pipeline" as a key strategic priority going forward. The company’s historical acquisition track record demonstrates its consistent approach to inorganic growth:

Financial Position

Indutrade’s operating cash flow decreased significantly to SEK 735 million in Q2 2025, down 29% from SEK 1,029 million in the same period last year. This decline was attributed to less favorable working capital movements and lower operating results.

The cash flow development is illustrated in the following chart:

Despite the cash flow challenges, Indutrade’s financial position remains solid. The interest-bearing net debt decreased to SEK 8,544 million (from SEK 9,490 million), and the net debt/EBITDA ratio improved to 1.5x (from 1.7x). The net debt/equity ratio also improved to 52% (from 63%).

Outlook & Management Commentary

Looking ahead, Indutrade management acknowledged ongoing market uncertainty while highlighting positive indicators. CEO Bo Annvik noted a positive book-to-bill ratio for two consecutive quarters and emphasized the company’s efforts to adapt costs to market conditions.

Key takeaways from the presentation included:

"Many companies continue to work actively with adapting costs to their respective market situations," the company stated, indicating a focus on operational efficiency to protect margins in a challenging environment.

The company also announced its Capital Markets Day scheduled for November 4, 2025, in Stockholm, suggesting confidence in its long-term strategy despite near-term headwinds.

Following Q1’s disappointing results, when Indutrade missed both EPS and revenue forecasts, the Q2 presentation reflects a company still navigating significant challenges while maintaining its strategic focus on acquisitions and cost management to position itself for eventual market recovery.

Full presentation:

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