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• Net Sales Growth: Increased by 16% in the second quarter, primarily due to acquisitions (17% growth), with organic growth at 1% and a negative currency effect of 2%.

• EBITA: Increased by 16% with a stable EBITA margin of 17.8% for the quarter.

• Profit After Financial Items: Grew by 14% in the second quarter.

• Cash Flow: Described as satisfactory but below high internal ambitions.

• Acquisitions: Completed two acquisitions in July with a total annual revenue of approximately 280 million SEK.

• First Half Year Net Revenue Growth: Increased by 13%, mainly due to acquisitions (15% growth), with slightly negative organic growth and currency effects.

• First Half Year EBITA: Increased by 12% with an EBITA margin of 17.4%.

• Return on Equity: 28% for the first half of the year.

• Equity Ratio: 34%.

• Earnings Per Share: Increased to 4.41 SEK from 4.25 SEK in the previous year.

• Electrify Division Revenue Growth: 26% growth, primarily from acquisitions (29%), with a 2% decline in organic growth.

• Control Division Revenue Growth: 28% growth, with acquisitions contributing 27% and organic growth at 4%.

• Tech Division Revenue Growth: 6% growth, with acquisitions contributing 13% and a 5% decline in organic growth.

• Niche Products Division Revenue Growth: 21% growth, with acquisitions contributing 16% and organic growth at 7%.

• International Division Revenue Growth: 4% growth, with acquisitions contributing 5% and organic growth at 2%.

• Warning! GuruFocus has detected 6 Warning Sign with FRA:LG72.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lagercrantz Group AB (FRA:LG72) reported a 16% increase in net sales for the second quarter, primarily driven by acquisitions.

• The EBITA margin remained stable at a strong 17.8% for the quarter.

• The company completed two acquisitions in July, contributing to a rolling 12-month revenue increase of 15%.

• The niche products division showed strong performance with a 21% revenue growth and an all-time high EBITA margin of 22.9%.

• The international division reported a 10% increase in EBITA, with a margin of 17.6%, indicating positive long-term development.

Negative Points

• Organic growth was slightly negative, with a 2% decline in the electrify division for the quarter.

• The tech division faced challenges, with a 5% decline in organic growth and a slight decrease in EBITA compared to the previous year.

• The control division struggled with a low EBITA margin of 12.1%, below the company's target.

• The construction-related businesses within the tech and control divisions were negatively impacted by a weak market.

• Cash flow performance did not meet the company's high ambitions for the quarter.