In This Article:
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Organic Growth: 3% in Q1 2025, first positive growth in two years.
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Leverage: Reduced to 2.1 times reported EBITDA.
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Flow Technology Sales Growth: 13%, driven by the PDAS acquisition.
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Niche Products EBITDA Margin: Improved from 9.7% to 10.0%.
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Solutions Segment EBITDA Margin: Increased to 4.8%.
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Net Sales: Decreased by 9% compared to last year.
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Free Cash Flow Impact: Negatively affected by one-off expenses, totaling just under SEK40 million.
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Net Debt: SEK1.4 billion, slightly lower than the previous quarter.
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Leverage Including Earn-Out Debt: 2.2 times.
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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Vestum AB (FRA:W0S) achieved positive organic growth of 3% for the first time in two years, indicating a successful focus on growth and investments.
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The company's leverage decreased to 2.1 times reported EBITDA, driven by divestitures and improved cash flow management.
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The acquisition of Nortech, a UK market leader in monitoring and control technology, is expected to strengthen Vestum's position in the energy and water distribution sector.
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The Flow Technology segment experienced a sales growth of 13%, supported by the PDAS acquisition, and continues to perform well.
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The Niche Products segment improved its EBITDA margin from 9.7% to 10.0%, showing signs of recovery and profitability enhancement.
Negative Points
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Net sales decreased by 9% compared to the same period last year, primarily due to divestments in the Solutions segment.
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Operating cash flow and cash conversion decreased, impacted by changes in net working capital and higher CapEx spending.
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Free cash flow was negatively affected by one-off expenses, including early bond redemption costs amounting to approximately SEK40 million.
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Market uncertainties, driven by global trade barriers, pose short-term challenges, although Vestum has no direct exposure to tariffs.
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The Solutions segment saw a decrease in sales and profits in absolute terms due to divestments, despite positive organic growth.
Q & A Highlights
Q: Can you elaborate on the organic growth across different segments, particularly in Flow Technology? A: Most of the organic growth was driven by the Solutions segment. Flow Technology faced tough comparisons due to last year's high water levels in the UK, but still managed solid numbers. Niche Products remained neutral in growth.
Q: How do you view the future trajectory for service-oriented units and their underlying markets? A: Service-based companies in the Solutions segment have shown sequential improvement in organic growth over the past five quarters. Infrastructure services have strong order books, indicating continued positive growth.