Palantir Technologies lifts guidance after Q2 results beat Wall Street estimates
Alimak Hek Group AB reported its Q1 2025 earnings, revealing an EPS of SEK 1.74, which fell short of the forecasted 1.76. Despite a 16% increase in order intake to SEK 2 billion, revenue remained flat year-over-year at SEK 1.732 billion. The market reacted negatively, with shares dropping 4.49% in pre-market trading, reflecting investor disappointment in the earnings miss and flat revenue growth. According to InvestingPro data, the company maintains a market capitalization of $1.26 billion and trades at a P/E ratio of 19.6x, suggesting premium valuation relative to near-term earnings growth expectations.
Key Takeaways
- Q1 2025 EPS of SEK 1.74 missed the forecast of 1.76.
- Revenue remained flat year-over-year at SEK 1.732 billion.
- Shares fell 4.49% in pre-market trading.
- Order intake increased by 16% to SEK 2 billion.
- EBITDA margin improved to 17.3% from 16.4% last year.
Company Performance
Alimak Hek Group’s Q1 2025 performance showed mixed results. While order intake increased by 16% to SEK 2 billion, revenue remained flat compared to the previous year. The company’s EBITDA margin saw improvement, indicating better operational efficiency. However, the flat revenue and a slight miss on EPS forecasts contributed to a negative market reaction.
Financial Highlights
- Revenue: SEK 1.732 billion (flat year-over-year)
- Earnings per share: SEK 1.74 (up from SEK 1.24 last year)
- EBITDA: SEK 300 million (up from SEK 285 million)
- EBITDA Margin: 17.3% (up from 16.4%)
- Net Result: SEK 184 million (40% increase)
Earnings vs. Forecast
Alimak Hek’s EPS of SEK 1.74 narrowly missed the forecast of 1.76. This minor miss, coupled with flat revenue growth, contrasted with a 16% increase in order intake, leading to a mixed market sentiment. The EPS miss was relatively small, but enough to cause investor concern given the company’s flat revenue.
Market Reaction
Following the earnings announcement, Alimak Hek’s stock declined by 4.49% in pre-market trading, reflecting investor disappointment in the earnings miss and stagnant revenue. The stock’s decline positions it closer to its 52-week low of SEK 91.2, highlighting broader market concerns about the company’s growth trajectory.
Outlook & Guidance
Looking forward, Alimak Hek aims to achieve an EBITDA margin above 18% and continues to invest in organic growth and potential acquisitions. The company remains committed to its dividend policy, distributing 40-60% of net earnings. While the company anticipates strong growth in its Industrial, Wind, and Temporary Access Solutions segments, it faces challenges from global market uncertainties and a soft building maintenance market in North America.
Executive Commentary
CEO Ole Christian Jodal expressed confidence in the company’s strategic initiatives, stating, "We continue to deliver on our new Heights program." He acknowledged market uncertainties but remained optimistic, saying, "We are managing and will manage the increased market uncertainty." Jodal also emphasized the company’s readiness for strategic investments: "We are ready to invest this money wisely."
Risks and Challenges
- Global market uncertainty due to US tariffs.
- Soft building maintenance market in North America.
- Potential slow growth in European markets.
- Exposure to macroeconomic pressures affecting industrial sectors.
- Ongoing restructuring and transition challenges.
Q&A
During the earnings call, analysts inquired about the impact of tariffs and the company’s restructuring efforts. Management assured that tariffs would have minimal impact, and they are confident in phasing out legacy projects in the Facade Access division. The company highlighted its ability to manage market uncertainties and its focus on operational excellence and cost management.
Full transcript - Alimak Hek Group AB (ALIG) Q1 2025:
Conference Operator: Call, participants will be in listen only mode. During the questions and answers session, participants are able to ask questions by dialing 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO, Ole Christian Jodal and CFO, Sylvain Granc. Please go ahead.
Ole Christian Jodal, CEO: Thank you. And yes, welcome to this Q1 call for 2025. And as always, as you’ve already heard, Sylvain is with me here. Let’s turn the page and a short recap of the group. Well diversified industrial company.
We are a leading provider of sustainable vertical access and working at height solutions. We have some fundamental drivers for success. And those you see to the right here, we are supported by global trends, even though we all have also something now which works against us, as we all know, but it’s not really a global trend. We have a leading market position in focused niches. We have a very solid global footprint with a large installed base, which is also a fundamental piece in our spare part and service business globally.
And altogether, we have a strong balance sheet, good cash conversion and a very solid financial position. Turning page, new heights. This is the transformation program we started in 2020 and which we are staying loyal and true to. And we are now in the last part of this first phase, the twenty five year, where we are now in profitable growth. And as you will see, we are still delivering profitable growth.
Sorry. The divisional structure you see down below and the strategic house, this is really our value creation engine where the divisions are fully owning their full business. And now, as we have also talked about, we are working on our 2,030 plan, the new Heights two point zero, which we will come back to during the autumn, where the focus will be even stronger profitable growth up to 02/1930. Turning page. These are our financial and sustainability targets.
And yes, those of you that have followed us know that we have been delivering on our targets. This is the second set that we have since we started new heights. And we are well en route to meet all of these if you are not already there and as you will also see more today. Turning page to say some few words about this tariff situation. Unfortunately, it’s something that we need to spend time on.
And I believe it’s both unlogical and counterproductive, and it doesn’t do anyone good and maybe at least The US. But as a global group, of course, it’s something we need to manage, and it’s like any other thing that we are managing in the global business. So and I think we are managing it in a in a good way. Short term, we, of course, have been working on, like everyone, with pricing management, the terms and conditions to manage to ensure that we can actually move on the tariffs and, of course, also optimizing our supply chain. And I think we are in a good position to continue to manage this.
However, there’s also this global economy effect where and the markets, you know, how they turn, and it’s increased uncertainty with all of this. It’s also the risk, as we know, for a global GDP slowdown. And we also see, maybe specifically in The US, continued delay of investments decisions because of all the uncertainty. But we have not seen any significant impact on our competitiveness. We have competitors, of course, but they are all in the same position like us.
No real making stuff in US. So So we also feel very strongly that we are able to pass this on to the market. And we are confident that our model will continue to help us manage through these turbulent times. Turning page and diving into Q1. Started off 25% in a very good and strong way, I would say, continuing our new heights journey driving profitable growth.
We delivered a strong order intake in the quarter, up 16% and reaching now more than SEK 2,000,000,000. We also delivered a strong earning and margin uptick with margin from now 17.3% versus 16.4% last year. We have made a smaller acquisition during the quarter where we acquired key assets from a Spanish company, Kamak Minor, which went bankrupt. And that also about the competitiveness now and the difficulty in the construction market where we are managing, I would still say, in a very strong way in a very difficult market. And I’ll come back to this Kamak Minor a little bit later.
And altogether, we also report a very solid financial position, taking down our deleveraging to 1.58 in the quarter. And this also, again, really opens the door for us for driving acquisitions, which we’re now also working even more actively on. Turning page, the details of Q1 for the group. Order intake was SEK $2,000,000,000.00 5,000,000,000, up 16%, sixteen % of concentrates also. Strong performance in Industrial Wind, Facade Access and HSPS divisions.
Revenue was SEK 1,732,000,000.000, flat to last year. And EBITDA, we reported SEK 300,000,000, up from the SEK $285,000,000, giving this margin of 17.3% versus the SEK 16 point 4 percent and supported by strong performance in Construction and HSPS. So we continue on our strong trend of profitable growth in a very challenging macro environment. And again, I think we are very well positioned to manage what comes ahead of us. Turning page, Service.
This is, as we all know, a fundamental piece of the group and also for each division. So very happy to see that we are continuing to grow this strongly. Order intake increased by 9% in the quarter. Also in fixed currencies, $819,000,000 now, up from SEK $7.48 Revenue was more or less flat and SEK $643,000,000 versus the SEK $638,000,000. Creates resilience, of course, and opportunities and something we really strategically continue to drive.
Turning page and diving into the divisions. Facade Access, I would say good performance in remaining challenging markets. Order intake was $496,000,000, up 17% or 16% at constant rates. We saw strong order intake driven by equipment orders in Hong Kong and Australia and also with refurbishment orders in Malaysia. Order intake in EMEA was also strong, supported by The Middle East and particularly UAE.
While we continue to see that the North American building maintenance unit market for the tall buildings continues to be soft. And that’s been there from, you know, the pandemic hit and through the interest rates and now through the tariff situation. So but it is something that the pipe is there. It’s just that it’s not being kicked or started. So it will come at some certain stage, absolutely.
Revenue was SEK $482,000,000, down 1%. EBITDA at SEK 46,000,000, flat to last year and also margin wise, 9.5%, same as last year. And this was negatively impacted in the quarter by some significant work in the final phase of some larger legacy projects. And we have talked about this before that we see that the 2025 is the year where we will start to really phase out and should end these older legacy projects. So I can’t give you exact timing throughout the year, but it’s something that we are now finalizing throughout the year.
But also that the building maintenance unit market is soft, and that’s also, of course, affecting somewhat our factory utilization. Turning page. We continue to drive what really we can affect. It’s the aftermarket service, retrofit, refurbishment and replacement, and this continues to serve us very well. It’s an important piece of the business and a growing piece.
We also continue to focus heavily on infrastructure, and we launched what you can see upright there, infrastructure access solutions, so really to take an even more strategic drive towards the infrastructure. And we also continue to focus on low complexity equipment, and we saw good development both in Asia Pacific and EMEA in the quarter. We drive organizational change and develop the organization. We have closed down, in fact, in Germany last year. Now it’s empty, and the land was sold in the quarter, while we’re also opening a new office in Indonesia to also ensure further growth.
So we continue to drive this transformation program that we have set out to do to secure margin improvements and maintain this focus on these areas I mentioned. And as you also all know now, this is a division which have full focus from Filip. He was in the first phase now of of the Tractel integration, managing both for Salad XS and HSPS. While now, you know that, you know, first phase of the Trackel integration, I would say, is really done in a very well way. So it was time to really stay true to the full overall concept that we have one EVP for each division.
So now Philippe will give this division full attention. Turning page, Construction. Also very solid performance. Order intake was SEK $490,000,000, up 11% also in fixed rates. Solid order intake for rental in Australia, which also used equipment in Europe continues to develop very well for us.
But overall, also a very high book to bill ratio, and this is a high order intake level. So it’s a good level for us. Revenue was $413,000,000, up 11%, eleven % at constant rates. And the increase, yes, was driven also by the good order intake in Q4. EBITA margin or EBITA was at SEK 66,000,000, up from the SEK 39,000,000, giving a margin of SEK 16,100,000.0 versus the 10,400,000.0, and it was driven by higher volumes and then primarily in hoist, mass climbing work platforms and the spare parts, which then have led to improved factory utilization.
Turning page. So yes, we made a small acquisition in the quarter. We know many of our competitors struggle in these times and have struggled for a long time. And this was one that went bankrupt, But they have some very nice products that we were able then to acquire, the IP. We acquired the spare parts and the and, yeah, the inventory, and, of course, also the customer lists.
And it’s some ladder hoist solution they have. They have a hoist or a winch, you know, compare that we can that fits into the truck tail portfolio, HSPS. And they also have this rack and pinion lighter base, which they have more than 2,000 installed machines around the world, which we now will both service and provide spare parts and also hopefully convert in due time. We have launched the Vectio three fifty, a lighter transport platform in the quarter, and we saw some nice orders coming from this. And this is also a machine which is now having some new features with the smart mode for both safety and ergonomics.
The STS 300 that we launched now, it’s almost two years ago. It takes time. The industry is very traditional. And but now we really start to see this product moving. And this is a machine then to to automize and make more safe and effective installation and and the installation of scaffolding systems.
So overall, I would say, construction continue to deliver very well in the remaining challenging market. We continue to invest in this business, and we will, for sure, be very well positioned for the day when the market really starts to come back. Turning page, HSPS. Also a very good start. Order intake, $382,000,000, up 14%, SEK thirteen million at constant rates.
Strong order intake of temporary access solutions in North America. And also, we saw nice orders in The Middle East and India on the elevator customer segment. Revenue was $349,000,000 from SEK $354,000,000, down 1% or 2% at constant rates. And it’s mainly impacted by also the exposure we have here to the construction end market and specifically in Europe then. EBITDA at 70,000,000, up from SEK 61,000,000, giving a margin of 20%, SEK seventeen point four % last year and driven by and supported by higher gross margin, favorable product mix and also good cost control.
So happy to see this is continuing to deliver well. Turning page, focus here. Temporary Access Solutions in North America, really happy to see it’s coming back. It has been slow moving, and these are suspended access, many also call them. So these are, as you see upright in the picture, machines used for maintenance of facade hanging up from the top.
So typically, a solution that would be in a city like New York, you would see a lot of this. So it’s not for everywhere, but some markets really do this, and we have the drive units. So it’s an important piece for our business. We also see continued success in our confined space. It’s an initiative that has been driven for from quite a long time.
And now we start to see some business coming, both in Spain and in Netherlands. Water companies are adopting our product. And of course, we continue to drive heavily product development changes. Now we have EVP, which is full time here, Jose Maria, that has been driving wind for many years. She’s now full time here.
And I’m sure we will see both changes, and we will have benefits from really getting both new eyes and a full time focus on this business. Turning page, Industrial. Also here, very solid start. Order intake was SEK $432,000,000, up 32% or 31% at fixed rates. Yes.
And the strong growth, of course, leads to a significant backlog increase during the quarter. Good growth for both new equipment and aftermarket. North America, Middle East are the areas in the quarter that are delivering most growth. Revenue was million, down 11%. And this is just due to timing of new equipment deliveries.
As you know, this is also project business, not that normally that’s very long project, but still projects. And the timing of when you close them is, of course, important. And that’s the only thing that sits in the somewhat lower revenue in the quarter. EBITDA at 90,000,000, down from SEK 106,000,000, giving still a very high margin of 25.3% versus SEK 26.6 but impacted then by lower revenue, partly offset by improved gross margins and also a nice aftermarket sales share. Turning page.
And Industrial, we continue to do what we have done for a long time. We are focusing on customers. We are focusing on segments, being closer, developing better solutions, understanding customer needs. And more and more segments come into this. We are driving, of course, cement, oil and gas, heavy industries, water, ports and also data centers is a nice growing area for us.
So fundamental piece of the strategy. Then we saw, as I mentioned last quarter, we developed this Mini 400 as an alicom replacement. Now we have seen the first orders coming. And we continue also here to invest in both product development and sales resources globally, which you also see a little bit in the results. Sorry.
Wind, strong start also for wind. Order intake was SEK $217,000,000, up 24% or 25% at concentrates. Strong growth for new equipment in Asia Pacific and also a promising start in North And Central Europe, especially the aftermarket is important in the quarter. The revenue was SEK 153,000,000, flat to last year. So stable and related to the order intake, of course.
But also important to note, it’s a very solid uptick in the order book in the quarter. EBITDA at SEK 28,000,000, slightly down from the SEK 30,000,000 last year, margin of SEK 18,200,000.0 versus SEK 19,800,000.0. Still, I would say this is the margin that which is a good level for this business. It’s very competitive. And we saw a slight decrease due to some mix effects.
And but here, we also continue to invest. Turning page. So yes, continue to drive operational excellence, improving processes, manufacturing, focusing on both safety and efficiency, cost out, to stay competitive in this industry, but also focusing on the top line, investing in both the markets and also our products to ensure that we will continue to grow in this business. And now it’s then Rafa, which was the COO in the wind division over many years, which is now the Head of Wind. So that takes us to the profit and loss.
And Sylvain?
Sylvain Granc, CFO: Thank you very much, Houle. Good morning, everybody. And then once again, we are pleased to report an adjusted EBITA growing more than revenue in the quarter. It’s a 5% growth for adjusted EBITA versus an almost flat revenue. And I will provide some additional color on the next slide.
Items affecting comparability relate to the sale of the Mandalor real estate. We sold the premises and received 100% of the cash in the quarter. With that sales, the restructuring project is basically completed in a successful way. Below EBITDA, quarterly amortization is coming down. This is due to intangible assets related to the Tractel acquisitions, which were fully amortized in 2024.
Finance net is down as well, and that’s coming from lower debt level, lower interest. And with 44,000,000 SEK, we are close to what we expect this year, which is around 40,000,000 SEK per quarter in the year. Taxation rates in the quarters come down as well slightly to 25.5% versus 26.1% in q one twenty twenty four, and that’s basically factoring the evolution in the country mix. With that taxation rate, we are basically very close to what we normally expect in the group, which is around 25% taxation rate as a recurring rate. Combining an improvement in adjusted EBITDA, the moment of capital gain, lower amortization charge, we have very nice growth in EBIT this quarter.
It’s a 28% growth. And if we had to that growth, the effect of lower finance net, lower taxation rate, that together leads to a very strong increase in the net result for the period. It’s a forty percent four zero, 40 percent increase versus q ’1 last year. Now moving to the main drivers behind the improved adjusted EBITA. It was a very good quarter for gross margin.
We saw margin expansion for industrial construction and IT productivity solution divisions. Facet access and wind were flat in in the quarter. And there are some, of course, some specific drivers for some divisions explaining the improved gross margin, but there are some common drivers as well. All divisions have been working on their manufacturing costs, on their supply chain, on their ability to pass on to the market unavoidable cost increases, and those actions play a big role in the gross margin improvement in the quarter. Regarding operating expenses, if one excludes the effect of items affecting comparability, we saw a slight increase in the quarter as a percentage of revenue, 24.8% versus 24 in q one twenty twenty four.
And that increase is is basically due to the industrial division, which has a a larger sales organization in order to support the cost. All other divisions were either flat or slightly decreasing as their g and a in in the quarter despite some cost inflation, typically labor, despite some increases in specific expenses such as product development, digital. So that that shows that, you know, we continue working on our cost efficiency, increasing expenses, which are required to serve our strategy, but reducing some cost as well when we don’t need them. Let’s move on to reason for the period. So as I said earlier, it’s a 40% growth in the quarter to SEK 184,000,000 versus SEK 131,000,000 in Q1 twenty twenty four.
Excluding items affecting comparability, result for the period was SEK 156,000,000 versus SEK 135,000,000 last year. That’s a 16% increase. EPS was SEK 1.74 versus SEK 1.24 last year. And adjusted for items affecting comparability and acquisition related amortization, EPS was SEK 1.79 versus SEK 1.66 in q one last year. If we move move to cash flow now, cash flow from operations was 175,000,000 SEK this quarter, slightly below last year.
It was a bit soft and mostly related to an increase in working capital driven by higher inventories. Some of it is due to temporary increases. For example, working progress in facade access corresponding to projects which will be fully delivered later in the year. So it’s it’s it will be reversed. Some of it may correspond to additional businesses such as mass claiming work platforms in Australia in the construction division.
In the long run, we are confident we we can keep working capital stable as a percentage of revenue, and we will continue to focus highly on cash generation. Next page relates to net debt and ROCE. Net debt came down to SEK 2,400,000,000.0 in the quarter versus SEK 2,600,000,000.0, sorry, end of Q4 twenty twenty four. And that decrease is driven by the revaluation of the euro term loan mainly. Our leverage came down to 1.58.
That was 1.79 at the end of q four twenty twenty four and 2.26 at the end of q one last year. And of course, this is well in line with our financial target of being below 2.5. As I just said, we will continue to focus That’s very important to us. Our capital allocation priorities remain unchanged.
We invest in organic growth. I alluded earlier to sales, product development, digital. We are actively working on acquisitions. We have a growing funnel. And and, of course, with the lower leverage, we do have the necessary dry product to deliver on those acquisitions financially.
We are committed to delivering on our dividend policy, which is to to pay 40 to 60% of our net earnings. Of course, this is ultimately a board proposal and and AGM decision. And and one final comment on return on capital employed, which has been going up, and we are pleased to see that up to 25.4% excluding goodwill, 10.4% including goodwill. The increase is basically driven by the improved EBIT. Most of this improvement comes from a better recurring performance of the business.
Of course, in the quarter, the higher EBIT was supported by the moment of capital gain. But again, it’s mostly driven by the better improved better recurring performance. On that positive note, I’m handing over to Ulleh.
Ole Christian Jodal, CEO: Thank you, Sylvain. So turning to the summary slide. So overall, a strong start to the year and something we are happy with. Continue to deliver on the new Heights program. And the order intake, as we said, about SEK 2,000,000,000 mark in the quarter, increase of 16% and contribution by all divisions, so very nice to see.
We increased the group earnings and margins and took another significant step up in the margin from the SEK 16,400,000,000.0 to the SEK 17.3 which makes us very well en route to deliver on the north of 18%, as we have said, yes, now close to two years ago from within two to three years. We will manage we are managing and we will manage also, we believe, the increased market uncertainty due to The U. S. Tariffs. We have a good setup that will manage this.
We do have a solid financial position. We have a good business model, both from a strategic perspective, but also from an operational perspective. And this will allow us to continue to invest, I’m sure, in our profitable growth agenda like we have also done in Q1. So we remain committed to our financial and sustainability targets. And we would like to thank all our employees, customers and partners for another good quarter and taking the group to new heights.
So with that, we turn page and move to Q
Conference Operator: The next question comes from Andreas Kowski from BNP Paribas, Exane. Please go ahead.
Andreas Kowski, Analyst, BNP Paribas, Exane: Thank you, and good morning. I hope the line is good enough and that you can hear me. I want to start with tariffs. I think you generate around 25%, thirty % of group sales in The U. S.
How much of that is imported? And how much do you import from China?
Ole Christian Jodal, CEO: Yes. I can’t give you the exact numbers, but we it’s unfortunate now that maybe you should mute when I talk, Andreas, but maybe that’s the reason why it’s echo, yes? Thank you. The most of what we sell in U. S.
Is important, but that’s the same thing with also the competitors. So we strongly believe that we are in a position to move this forward to the market. Very minor is coming out of China, so that has no real any effect on us as a business. We moved some of that away already when the first tariff rounds came with Trump’s first period. It’s hardly anything left from China.
Conference Operator: The next question comes from Andreas Koski from BNP Paribas, Exane. Please go ahead.
Andreas Kowski, Analyst, BNP Paribas, Exane: Thanks. Hopefully, it will be better now. So I heard your question. Thanks for that. And how much would you have to raise your settling prices to offset the tariffs as they stand today?
And have you already raised your prices? How do you plan to implement them?
Ole Christian Jodal, CEO: No. But we have worked on our terms and conditions. So tariffs will be passed on the way they hit. But we also work with our supply chain. It’s a lot of details there that will not be so in certain areas, it will not be influenced by tariffs.
So but I can’t give you an exact number. But and this varies also from division to division. But we are working on pricing, and we are pushing forward pricing. So we feel relatively confident that this will be managed and not really a significant impact or any impact in that sense to the business. The more concern, which the overall uncertainty about market development, global GDP and the investment decision taking and so forth, but not specifically the tariff impact for us because also competition is in the same position.
Andreas Kowski, Analyst, BNP Paribas, Exane: Yes. And we couldn’t see any of that in your order intake in Q1, which was very, very strong. Do you think some of that strong order intake was driven by preordering ahead of tariffs? Or is the order intake number reflecting the underlying situation and more sustainable?
Ole Christian Jodal, CEO: Yes. We didn’t have any specifically high order intake in The U. S. This quarter. So no, it’s not the order intake is not driven by stock up or pre buying in The U.
S, And you saw we had good order intake in Q4, and we are also now continuing with even stronger order intake in Q1 for a group. So there is I think we are getting paid for what we are actually been good at doing for over a long, long time, be close to our customers, develop new products and yes, be good at what we do and focused. And we continue to be that. And I’m sure we take market shares and that we are ahead of the game now. But the market overall, we can’t influence.
But in this market, we are doing well.
Andreas Kowski, Analyst, BNP Paribas, Exane: Yes. And I agree, it’s a very uncertain market. And I would be surprised if we don’t see, say, decision making among customers becoming slower. But have you started to see any of that already in April? Or is that yet to come if it will happen?
Ole Christian Jodal, CEO: I can’t say that we have seen any specifics of that. And but of course, that’s the biggest uncertainty. But then again, you had positive or what if you can call it that or new turbulent news the other day that tariffs will most likely be reduced and that it might not be power will be fired. So there are also signs that maybe things are or could be coming down a little bit, which and it’s difficult to say how much of that you need to see for giving confidence to the market actually investments can go on. It’s very uncertain, but it’s not all black.
Andreas Kowski, Analyst, BNP Paribas, Exane: Yes. And then lastly, on the Facade Access margin, and I apologize if I missed this already, but it was a somewhat weaker margin than I am, I guess, consensus expected, and we know the drivers of that. But what about the coming quarters? Do you still have those larger legacy projects to be delivered? Or was this sort of a one off in Q1 and now they’ve been delivered and the margins should bounce back already in Q2?
Ole Christian Jodal, CEO: These projects are not delivered. These projects are still ongoing. And but they have been with us for a long, long time. But we they should be closed by the end of the year. I can’t give an exact timing.
Some might be closed in Q2, some in Q3. And I can’t say also exactly the impact in each quarter. But we should be able to phase out, as we have said all along, all these old legacy projects during 2025. And I think if you look at the overall trend, I’m also disappointed being flat quarter over quarter. But if you look at the overall trend, I feel still very confident, and we are developing positively with this business.
So we will change it the way we have said.
Andreas Kowski, Analyst, BNP Paribas, Exane: The
Conference Operator: next question comes from Anna Widstrom from Carnegie.
Anna Widstrom, Analyst, Carnegie: Hello, can you hear me guys?
Ole Christian Jodal, CEO: Yes, very good. Thank you. Hello.
Anna Widstrom, Analyst, Carnegie: Okay, good. So just first question to maybe get some clarification. Given that you’re working with price increases and so on, should we view the order intake as mainly relating to volumes? Or is there a significant price effect in that as well?
Ole Christian Jodal, CEO: No, I wouldn’t say it’s a significant price effect in that. Nothing extraordinary, absolutely not. So that’s the nothing different to before. We constantly work on pricing and we but this is the most is the volume and that effect. So yes.
Anna Widstrom, Analyst, Carnegie: Okay, good. And then going to this moment of closure, sorry. Has that started to affect profitability positively? And if so, how should we think about the sort of underlying profitability effect?
Ole Christian Jodal, CEO: Yes. That’s now affecting profitability positively, absolutely. But as I said, what we had a negative counter effect now in this quarter with these legacy projects, but also the fact that the order intake for new, bigger machines, BMUs, has been low for quite a long time. And that also affects our one remaining factory,
Anna Widstrom, Analyst, Carnegie: which
Ole Christian Jodal, CEO: is factory in Spain. So they had a lower load in the quarter. And that is not a quick turnaround in this picture either because that order intake has been low for a while. But we have the full effect now from the closure of Mammondorf.
Anna Widstrom, Analyst, Carnegie: Great. And thinking about the timing of the new equipment deliveries in Industrial, is that deliveries has that has sort of been postponed into Q2? And should we maybe view parts of the margin decrease year over year as also a timing effect that should be potentially offset in Q2?
Ole Christian Jodal, CEO: Yes. I think it’s first of all, this it’s just the timing. So I can’t promise that all of them and that you will have it all back plus anything because this is always a timing question. But absolutely, when you have less than a quarter, then typically, you would have a little bit they will come back because they are there. They are due to be invoiced and delivered.
So but sometimes, it’s more projects taking more time than others taking shorter time. And yes, you’re close. And this is also what I’ve been talking about since I came here. You have this lumpiness in the quarters, basically in all divisions to some extent. So you need to see it that way.
When you talk about margin, you said margin is lower. I wouldn’t agree. Yes, technically, but it’s still 25%, twenty six % EBITDA margin in industrial, which is very, very good. So being at that level, I think, is something that I’m happy with, even though, of course, you always want to push it. But yes, just to make the point that it’s we don’t see that as a big problem.
Anna Widstrom, Analyst, Carnegie: Yes, that’s very clear. Thank you. And just looking regionally, it seems Europe remains in a bit more negative territory, while The Americas and APAC is growing. What is your sort of sense of the European market dynamic currently and maybe going forward?
Ole Christian Jodal, CEO: I think Europe has slowly and steadily started to improve a little bit from a construction perspective. But still, Europe has been very slow for a long time. And then again, now you also have this uncertainty in the market with tariffs and inflation and whatnot. But long term, you know, I think the opposite. This will strengthen Europe, and it will force more investments.
We have already heard about several countries what they talk about, you know, defense investments. And this will be this is money that will go into the markets. Yes, they go into defense, but that trickles down in overall industry and the society in general, all of that money. So these investments will strengthen Europe. It’s just a question of timing.
But I think slowly and steadily, we should start to see Europe coming back unless there is some sort of fundamental global slowdown that will affect, again, the market for some time. But that remains to be seen on how on what happens with the tariffs.
Anna Widstrom, Analyst, Carnegie: Perfect. And then just the last one for me. Leverage continues to improve. And just given the uncertainty in the market, how is your thinking about M and A in the near term?
Ole Christian Jodal, CEO: Our thinking is that it’s an important piece of the group strategy. And as I’ve said also many times, when we did Tactile, that was such a size and significance that I needed to ensure that we landed that well before we took on other things, also not at least due to the legacy of the two previous acquisitions before my time that wasn’t really managed that well. So and we are now in a position where we have proven that we can handle this well. We are in a position where we have really deleveraged in a very solid way and strong financially, even though it’s a lot of turbulence around us. So we are ready to invest this money wisely.
And we have a nice funnel. We work very intense on that. So I would be disappointed if we don’t start to see some things coming.
Conference Operator: There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
Ole Christian Jodal, CEO: Yes. Thank you. We have a couple of written questions to us here. So we start with the first one. From cash flow statement, you paid 28,000,000 SEK for earn out.
Was this related to toll cranes? So I think I’ll hand that to mister Sylvain.
Sylvain Granc, CFO: Yep. And the short answer is yes. Yes. And and just to be complete, that’s the final payment, so there is no no pending payment in that respect.
Ole Christian Jodal, CEO: Yep. Okay. So that should give a clear answer to that question. Then we have another questions here. You wrote about rolling our out integrated design services, IDS, in EMEA, APAC regions in the annual letter.
Have this started? If yes, what have been the responses so far? And is this kind of service unique? Or does the or does competitors offer the same service? Good question.
First of all, yes, it’s being rolled out. Yes, we are starting to see business coming from this. And is this unique? Both yes and no. It’s not unique in the presence this is something which exists in the market, but it’s unique that we, as a supplier, does it.
So that also means that our competitors, as far as I know, they don’t do it. And why do we do it? Yes. Because, you know, in this specific business, you need to understand the business model, you know, and that was something when I got there, we started to, okay. And then we learned that we are actually in the backseat when we sell new equipment.
You know, we we offer our machines to consultants and architects, not to the real end user of this machinery or the general contractors per se. So we work with the so called middlemen, and that is actually putting us outside where we would like to be. We it’s difficult to sell the value when you are in that position. So that’s when we decided that we want to change, you know, this concept. We are too far out in the value chain.
We want to be closer to the real decision makers. So then we said, okay, let’s start that consulting ourselves. You know? Let’s be that type of consultant to the general contractor instead of they using third party players. And that has been very, very well appreciated because the existing consultants, they have to come to us anyway as a supplier.
So now we are just cutting one layer, and we are in a prime position to work with the general contractors to show the value. And we are also, of course, in a prime position to ensure that it’s designed for the most valued solution, which should be ours. So that’s the idea and the concept behind it. And it works. So with that, I hope I answered that question.
And we don’t have any further written questions here. So with that, I think we close it from our end. And again, thank you to everyone. Thank you for good questions and for those of us following us and to our employees, customers, partners. Thank you.
Until next time.
Sylvain Granc, CFO: Goodbye.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.