In This Article:
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Boreo Oyj (FRA:YKK) recorded a 4% organic sales growth in Q1 2025, marking the second consecutive quarter of growth.
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The company achieved a strong gross margin of 32%, contributing to a profitability uplift from 0.6 million last year to 1.3 million.
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The electronics business area showed robust performance with a 10% growth in sales and a doubling of operational EBIT to 1 million.
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Boreo Oyj successfully completed acquisitions, including Spes Electronic AS and Elfa Distrelec, expected to enhance portfolio quality and growth prospects.
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The company has improved its working capital management, resulting in a cash conversion rate of 22% for the quarter.
Negative Points
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There is ongoing uncertainty in the global market due to geopolitical tensions and trade discussions, which could impact future operations.
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The technical trade business area experienced flat sales compared to last year, indicating challenges in market conditions.
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The Baltic countries' operations continue to face a challenging operating environment, impacting performance.
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Boreo Oyj's leverage increased due to the redemption of an old hybrid bond and interest payments, indicating financial pressure.
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The construction sector remains tough, with mixed performance across different regions and businesses.
Q & A Highlights
Q: Can you talk about the drivers of working capital and the impact of PM Nordics orders on working capital development? A: Kari Nerg, CEO, explained that despite dealing with large machines and high-value orders, the Putzmeister business is designed to remain light on working capital. While some buildup is expected due to increased volumes, it is not anticipated to be material, thanks to favorable cash flow arrangements with suppliers and customers.
Q: What is behind the production issues at F&B, and when do you expect this to be resolved? A: Jesse Petaja, Senior VP, noted that the issues were due to a combination of high resource allocation at the end of 2024 and subsequent employee overtime, leading to bottlenecks. The situation has improved since the end of Q1, with the problem largely resolved by March.
Q: Can you comment on the development in construction-related businesses excluding PM Nordic? A: Kari Nerg stated that the outlook for construction-related businesses in Finland and Estonia remains modest, with some improvement in Finland. However, the overall construction market in Finland is not expected to boom in the near term.