Alligo (ALLIGO) Q1 2025 earnings summary

Executive summary

• Revenue increased by 2.9% year-over-year to MSEK 2,232, driven by 7.8% acquisition growth, while organic sales declined by 2.5% due to weak demand, especially in Sweden.

• Adjusted EBITA/EBITDA fell to SEK 74 million from SEK 84 million, with margin declining to 3.3% from 3.9%, impacted by lower volumes and negative country mix.

• Cost reduction programs totaling SEK 100 million were initiated, with effects expected mainly after summer 2025.

• ReCare workwear service was launched in Sweden, with plans to expand to Norway and Finland by year-end.

• Acquisition of Svenska Batterilagret AB completed, contributing positively to revenue and profit.

Financial highlights

• Gross margin was 40.9% (41.1% year-over-year), slightly diluted by lower-margin acquired businesses.

• Operating cash flow was SEK -38 million, impacted by inventory buildup and ERP-related invoicing delays in Norway.

• Net debt/operational liabilities to EBITDA ratio increased to 2.9, reflecting higher acquisition pace and lower EBITDA.

• CapEx to depreciation ratio was 4.9; investing cash flow driven by acquisitions.

• Equity/assets ratio stood at 38%–44.2% at quarter-end.

Outlook and guidance

• Strategic focus remains on sales growth, cost efficiency, and margin protection, with new sales and marketing initiatives underway.

• Cost savings from the SEK 100 million program will be realized mainly after summer 2025.

• Group EBITDA margin target is 10%, with Sweden expected to exceed 12%, and Finland and Norway targeted at 6–8%.

• Market signals are turning more positive, with expectations for gradual improvement in demand.