Arjo (ARJO) Q2 2025 earnings summary

Executive summary

• Organic net sales grew 3.0% in Q2 2025, driven by double-digit growth in the US, strong order intake, and robust performance in patient handling equipment.

• Cost efficiency initiatives are delivering results, supporting underlying profitability despite currency and US tariff headwinds.

• Canada achieved over 20 consecutive quarters of growth.

• Western Europe saw a -2.4% decline in net sales due to tough comparisons and UK order delays, but France, Germany, Italy, and Spain posted strong growth.

• Rest of World grew 0.5% organically, with India, Singapore, and UAE achieving double-digit growth, notably 40% in India.

Financial highlights

• Net sales: SEK 2,678 M in Q2 2025, with organic growth of 3.0% year-over-year.

• Gross margin was 43.4%, nearly flat versus last year's 43.6%, supported by lower material costs and price adjustments but offset by currency and U.S. tariff headwinds.

• Adjusted EBITDA was SEK 475 million (down from SEK 496 million Q2 2024), mainly due to currency and tariff impacts.

• Operating cash flow was SEK 205 million (down from SEK 344 million Q2 2024), with cash conversion at 46.6% (69.7% Q2 2024); 59% excluding VAT settlement.

• Net debt to adjusted EBITDA was 2.3, slightly down from 2.4 last year; equity ratio at 48.7%.

Outlook and guidance

• Organic net sales growth for 2025 expected to be within the 3–5% target range.

• Strong order book and higher order intake than sales growth for three consecutive quarters support confidence in a stronger H2 2025.

• Management aims to keep OpEx flat as a percentage of sales for the full year.

• Cash conversion target for the full year remains at 80%, with expected improvements in H2.