Nordrest Q4 2024 presentation: Strong margin improvement and Finnish expansion

Introduction & Market Context

Nordrest Holding AB (NREST), a Swedish meal service company with roots dating back to the 1980s, presented its fourth quarter and full-year 2024 financial results on March 6, 2025. The company, which operates across multiple customer segments including defense, corporate, education, and healthcare, reported improved profitability and continued growth despite mixed performance across its business segments.

Nordrest’s business model focuses on locations with predictable customer flows, allowing for effective planning of purchasing and staffing while keeping marketing costs low. The company employs a decentralized management approach, giving unit managers significant autonomy in service delivery and menu planning.

Quarterly Performance Highlights

Nordrest reported solid financial results for Q4 2024, with net sales reaching 534 million SEK, an 8.6% increase compared to 492 million SEK in the same period last year. The company’s EBITA improved to 51 million SEK from 42 million SEK, resulting in an EBITA margin of 9.5%, up from 8.5% in Q4 2023.

As shown in the following quarterly performance summary:

Growth varied significantly across customer segments, with the Travel segment leading the way with an impressive 58.5% year-over-year increase in Q4. Hospitals & Elderly Care and Higher Education segments also showed strong performance, growing by 15.9% and 10.5% respectively. The Schools segment grew by 5.0% and Defense by 3.9%, while the Corporate segment declined by 4.8% due to the divestiture of unprofitable rental agreements.

The following table breaks down net sales by customer segment:

Detailed Financial Analysis

For the full year 2024, Nordrest reported net sales of 1,908 million SEK, representing a 7.7% increase from 1,771 million SEK in 2023. Organic growth for the period was 7.1%. EBITA for the full year reached 169 million SEK, slightly up from 164 million SEK in 2023, though the EBITA margin decreased to 8.8% from 9.3% in the previous year.

The company maintains a strong financial profile characterized by low working capital needs (0.4%), modest capital expenditure requirements (1.3%), and robust operational cash generation (91.4%). These metrics reflect Nordrest’s efficient business model and support its ability to generate consistent returns for shareholders.

Nordrest’s financial efficiency metrics are illustrated in the following graphs:

The company has established clear medium-term financial targets for the next 3-5 years, including organic growth exceeding 10%, an EBITA margin of 8-10%, a dividend payout ratio above 50% of profit after tax, and maintaining a net debt to EBITDA ratio below 2.0x.

The medium-term financial targets are summarized in this slide:

Strategic Initiatives

A significant strategic development announced during the presentation was Nordrest’s expansion into the Finnish market through the acquisition of Garam & Vermiglio Catering Oy, effective January 1, 2025. This acquisition represents an important milestone in the company’s international growth strategy.

The Finnish market entry is highlighted in this slide:

Nordrest’s business model centers on providing meal services to locations with predictable customer flows across various segments. The company operates with a decentralized management approach that emphasizes entrepreneurship at the unit level while maintaining systematic processes across the organization.

As illustrated in the company overview:

Forward-Looking Statements

In line with its dividend policy, Nordrest proposed a dividend of 5.00 SEK per share for 2024, corresponding to a payout ratio exceeding 50% of profit after tax. This aligns with the company’s financial goals regarding growth, profitability, and capital structure.

Looking ahead, Nordrest aims to continue its growth trajectory while maintaining profitability within its target range. The company’s expansion into Finland represents a strategic step toward broader international presence, while its focus on locations with predictable customer flows provides resilience against economic cycles.

As of May 15, 2025, Nordrest’s stock was trading at 151 SEK, showing a positive change of 1.34% and trading within its 52-week range of 104.4 to 159.4 SEK. The company’s solid financial performance and strategic initiatives position it well for continued growth in the meal service sector.

Full presentation:

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