Cynca Nordic (CYNCA) Q1 2025 earnings summary

Executive summary

• Achieved 3% organic growth in Q1 2025, marking the first positive organic growth in two years and reversing a negative trend.

• Profitability improved, with adjusted EBITA margin at 8.7% for Q1 2025 and leverage reduced to 2.1x EBITDA, below the 2.5x target.

• Cash flow decreased due to higher investments in organic growth, increased working capital, and one-time financial costs from early bond redemption.

• Portfolio reshaped through major divestments and the acquisition of Nortech, a UK leader in Flow Technology, to be consolidated from Q2.

• Strategic focus remains on growth through organic initiatives and acquisitions.

Financial highlights

• Net sales for Q1 2025 were SEK 900 million, down 9% year-over-year, mainly due to divestments in the Solutions segment.

• Adjusted EBITA for Q1 2025 was SEK 78 million, with an 8.7% margin; EBITA margin increased by 0.5 percentage points year-over-year.

• Free cash flow was negatively impacted by one-off expenses, notably SEK 25 million from early bond repayment in Q1 2025.

• Net debt stood at SEK 1.4 billion, slightly lower than the previous quarter; financial net debt/EBITDA was 2.1x at quarter-end.

• Cash flow from operating activities was SEK 20 million, down from SEK 137 million year-over-year.

Outlook and guidance

• Expectation of continued strong performance in Flow Technology, supported by recent acquisitions and stable demand.

• Anticipate significant interest cost savings from new capital structure established in March 2025.

• Free cash flow is expected to grow from Q1 onward, with a target of 60% free cash flow to EBITDA ratio.

• Strategy remains focused on organic and acquisition-driven growth with increasing profitability.

• Market uncertainties persist due to global trade barriers and macroeconomic factors, though no direct tariff exposure.