CAG Group (CAG) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was 230.4 MSEK, a 0.8% decrease year-over-year, with stable organic growth excluding subcontracting revenue.

• Adjusted EBITA increased by 7% to 22.8 MSEK, margin improved to 9.9% from 9.2% in Q1 2024.

• After-tax profit was 13.5 MSEK, down from 14.7 MSEK; EPS was 1.88 SEK (vs. 2.05 SEK).

• Dividend of 4.10 SEK per share to be paid in May, up from 3.90 SEK.

• Closure/divestment of CAG Senseus resulted in a non-recurring cost of 3 MSEK in Q1, with positive margin effects expected from Q2.

Financial highlights

• Operating cash flow was 14.5 MSEK, up 18% year-over-year.

• Average number of employees was 429, a 5% decrease year-over-year.

• Net cash position (excl. leasing) improved to 87.3 MSEK from 53.4 MSEK.

• Over 50% of revenue is recurring; dividend policy is to distribute at least 50% of after-tax profit.

• Solid equity ratio at 58.9% (up from 52.5%).

Outlook and guidance

• New medium-term targets: 10% annual revenue growth, adjusted EBITA margin above 10%, net debt not to exceed 1.5x adjusted EBITDA, and dividend payout of at least 50% of net income.

• Solid demand expected in Defence and Banking & Finance segments.

• General market activity is recovering, with normalization in price and salary inflation.

• Continued rapid AI development, but at a normalizing pace; increasing M&A activity anticipated.

• Management expects a slightly positive margin impact from the completed Senseus divestment starting Q2.