Cynca Nordic (CYNCA) CMD 2025 summary

Strategic update and repositioning

• Shifted from defensive debt reduction to growth mode, focusing on asset-light, high-margin suppliers in infrastructure niches, especially water infrastructure, with decentralized operations.

• Capital allocation now prioritizes acquisitions in product companies to drive self-financed growth and margin expansion, leveraging free cash flow.

• Over 60% of product exposure is in water infrastructure, with synergy extraction through cross-selling and procurement.

• Product companies now contribute 63% of profits, up from 21% in 2021, with a continued focus on increasing this share.

• Three segments: Flow Technology (44% of profits), Niche Products, and Solutions, each with tailored growth and margin improvement strategies.

Financial performance and targets

• 2024 net sales were SEK 4,246 million, EBITDA/EBITA margin 10.5%; product companies contributed 63% of EBITA.

• Financial net debt reduced by SEK 1.4 billion (50%) over two years, leverage at 2.2x by Q4 2024, with full bank financing from March 2025.

• Free cash flow for 2024 was SEK 204 million, with improved net working capital ratio supporting cash generation.

• Cost of debt expected to drop from 8.6% to 4-5% by 2026 due to debt mix changes and lower base rates.

• Financial targets: ≥15% EBITA growth per share, ≥12% EBITA margin, net debt/EBITDA <2.5x, and reinvestment of all cash flows.

Business developments and segment performance

• Flow Technology segment achieved 18.5% margin, driven by acquisitions and organic growth, with large upside potential in water infrastructure.

• Niche Products and Solutions segments faced challenging markets in 2024 but are expected to recover and improve margins in 2025.

• Product companies generated SEK 1.8 billion in revenue at a 16% EBITDA/EBITA margin, contributing 63% of group EBITDA.

• Pump Supplies, acquired in 2021, delivered record sales and profitability in 2023 and 2024, expanding with the acquisition of PDAS.

• 46% of portfolio delivered EBITDA margins above 12%, but over half of sales are still below target, mainly in Solutions.