Boreo (BOREO) Q1 2025 earnings summary

Executive summary

• Achieved two consecutive quarters of organic sales and profit growth, with Q1 2025 organic sales up 4% year-over-year to EUR 34 million and operational EBIT up 128% to EUR 1.3 million.

• Gross margin improved to 32% from 29% in Q1 2024, reflecting operational actions and acquisitions.

• Order books increased compared to end of 2024, supporting a positive outlook for Q2, though H2 2025 remains uncertain due to macroeconomic and geopolitical factors.

• Two acquisitions announced: Spetselektroodi AS (Estonia) and Elfa Distrelec sales activities (Finland and Baltics), expected to close in Q2 and Q3 2025.

• The 'Back to Growth' plan advanced with cost reduction, working capital release, portfolio strengthening, and a property sale generating a EUR 0.7 million capital gain.

Financial highlights

• Net sales reached EUR 34 million, up 4% year-over-year; operational EBIT increased by 128% to EUR 1.3 million, with a margin of 3.9%.

• Gross margin improved to 32% (from 29% in Q1 2024); operating cash conversion for Q1 was 22%, with working capital increasing by EUR 1 million.

• ROCE improved to 8.8% (from 7.9% in Q4 2024); leverage increased to 3.1x net debt/operational EBITDA.

• Cash and cash equivalents at quarter-end: EUR 7.2 million; available liquidity: EUR 11.5 million.

• Net cash flow from operating activities was EUR 0.3 million, impacted by higher working capital.

Outlook and guidance

• Back to Growth plan progressing well; company is positioned for significant earnings improvement as market conditions recover.

• Strategic targets: minimum 15% annual average operational EBIT growth, minimum 15% ROCE, and net debt/operational EBITDA of 2-3x.

• Profitability expected to remain good in Q2 2025; increased uncertainty for H2 due to trade and geopolitical risks.

• Expectation of improved working capital efficiency and profitability in H2 2025 due to favorable profiles of acquired companies.