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Investing.com -- BTS Group AB (ST:BTSb) posted weaker second-quarter results as profit and margins declined, but its shares rose more than 3% on Friday after the company highlighted strong growth in Europe and other markets.
The Stockholm-based consulting and professional services firm said net sales for the April-to-June period amounted to MSEK 721, slightly below MSEK 730 a year earlier.
Currency-adjusted growth was 7%, of which 2% was organic. EBITA fell 23% to SEK 84 million from SEK 110 million, while the EBITA margin narrowed to 11.7% from 15.1%.
Profit after tax dropped 35% to SEK 39 million, with earnings per share down to SEK 2.03 from SEK 3.11.
For the first half of 2025, net sales reached SEK 1.37 billion compared with SEK 1.35 billion in the same period last year.
EBITA declined 15% to SEK 143 million, with the margin falling to 10.5% from 12.5%. Profit after tax came in at SEK 65 million, compared with SEK 114 million in 2024, while earnings per share were SEK 3.35, down from SEK 5.86.
Regional performance diverged sharply. BTS North America recorded a 4% decline in revenue in the quarter, with organic sales down 8%.
EBITA for the unit fell to SEK 23.4 million from SEK 59.7 million, with the EBITA margin dropping to 6.9% from 15.5%.
The company cited inefficient sales operations, a weaker U.S. dollar and one-time costs of SEK 14.1 million related to severance and legal fees from the Sounding Board acquisition.
Currency effects added SEK 3.5 million in costs, together accounting for about half the SEK 36.3 million drop in EBITA.
BTS Europe reported 31% revenue growth in the quarter, reaching SEK 132 million, all of it organic. EBITA rose to SEK 19.1 million from SEK 11.8 million, with the margin improving to 14.4% from 11.3%.
BTS Other markets also expanded, with sales up 19% to SEK 223 million and EBITA at SEK 39.8 million compared with SEK 36.3 million a year earlier. APG revenue fell 21% to SEK 29 million, with EBITA steady at SEK 0.1 million.
Cash flow from operating activities was negative at SEK 40 million, compared with negative SEK 10 million in the prior-year quarter.
For the first half, operating cash flow was negative SEK 97 million, down from SEK 17 million.
Total (EPA:TTEF) cash flow for the half-year amounted to negative SEK 247 million, compared with negative SEK 32 million in 2024.
Cash and cash equivalents at the end of June were SEK 389 million, compared with SEK 516 million a year earlier. Net debt stood at SEK 123 million, against net cash of negative SEK 76 million in 2024.
The firm also pointed to growth in executive coaching, where EBITA rose 34% in local currency, and to increased demand for AI-related services.
Bookings for AI adoption services totaled $8 million by July 31, a 425% increase compared with the same period last year.
Its Wonderway Verity AI platform reached $3 million in bookings by the end of July, doubling from the first quarter.
BTS lowered its outlook earlier this month, saying EBITA for 2025 is expected to be lower than in 2024.