Bergman & Beving (BERG) Q1 25/26 earnings summary

Executive summary

• Revenue increased by 5% to MSEK 1,319, mainly driven by acquisitions, while organic sales declined amid weak demand in construction and industrial segments.

• EBITA rose 9% to MSEK 130, marking 22 consecutive quarters of profit growth, with the EBITA margin improving to 9.9% from 9.5% year-over-year.

• Four acquisitions completed (one post-period), adding annual sales of approximately MSEK 300, supporting the acquisition-driven growth strategy.

• Divestment of Skydda's Nordic operations was finalized, resulting in a loss of SEK 45 million and a delay in EBITDA margin targets; Ahlsell became the new owner on July 1.

• Goodwill write-down of SEK 270 million and restructuring costs of about SEK 70 million were recognized in connection with the Skydda divestment.

Financial highlights

• Adjusted EPS (R12) improved to SEK 8.30 (7.40) before dilution; earnings per share for the quarter were SEK 2.10.

• Cash flow from operating activities was strong at MSEK 182, though slightly below last year due to slower inventory reduction.

• Net debt to EBITDA increased to 2.5, and operational net loan liability rose to MSEK 1,412, mainly due to acquisitions.

• Return on working capital (P/WC) improved by 5 percentage points to 32%, targeting 45% next fiscal year.

• Equity/assets ratio stood at 31% at quarter-end.

Outlook and guidance

• No organic top-line growth expected until year-end; acquisitions will remain the main driver of profit growth in the near term.

• Management expects a temporary EBITA shortfall of around MSEK 45 due to the Skydda divestment but aims to offset this with high-quality acquisitions.

• Market recovery is anticipated possibly at the beginning of next year, with the last month of Q1 being the strongest but not a clear sign of sustained improvement.

• Targets of MSEK 500 EBIT and a 10% operating margin are reaffirmed, though with a slight delay due to the divestment.

• Focus remains on profit expansion over revenue growth and tight cost control.