Bergman & Beving (BERG) Q2 24/25 earnings summary

Executive summary

• EBITA increased by 12% year-over-year, marking the 19th consecutive quarter of profit growth, with all three divisions contributing despite challenging markets.

• Profitability (P/WC) improved by 6 percentage points, and EPS for the year rose 12%.

• Acquisitions offset a 3% organic revenue decline, with acquired revenue growth at 9% and three acquisitions completed year-to-date.

• Cost efficiency measures and inventory optimization supported margin improvements.

• Safety Technology posted over 50% earnings increase, leading divisional profit growth.

Financial highlights

• Q2 EBITA: MSEK 120 (up 12%), EBITA margin: 10.5% (up from 9.8%), and EBIT increased 11% to a margin of 14%.

• Q2 net profit: MSEK 55 (up 12%), profit after financial items: MSEK 73 (up 14%).

• Six-month revenue: MSEK 2,397 (up 3%), EBITA: MSEK 239 (up 13%), net profit: MSEK 113 (up 16%).

• Earnings per share (12 months, after dilution): SEK 7.50 (up from SEK 7.15), up 12% year-over-year.

• Cash flow from operating activities: MSEK 94 in Q2, MSEK 288 for six months, affected by seasonality and earlier inventory purchases.

Outlook and guidance

• Management expects continued challenging market conditions until at least early 2025, with market recovery anticipated earliest in 2025.

• Financial targets: MSEK 500 in operating profit, 10% operating margin, 45% profitability (P/WC), and 75% own products by fiscal 2025/2026.

• Acquisition target remains at MSEK 50-80 in acquired earnings for the year.

• Additional cost-saving measures and efficiency improvements are expected.

• Inventory reduction will continue but at a slower pace, aiming for pre-pandemic levels.