Indutrade (INDT) Q2 2025 earnings summary

Executive summary

• Order intake remained stable year-over-year, with half of companies showing organic growth and strong demand from the energy sector, but net sales declined 4% due to currency headwinds, fewer working days, and a lower order backlog.

• EBITA margin was 13.7%, down from 14.8% last year, with sequential improvement from Q1; EBITA fell 11% to SEK 1,115 million.

• Four acquisitions completed year-to-date, adding SEK 425 million in annual sales; acquisition pipeline remains strong for H2.

• Market uncertainty persists, with a slightly lower order backlog expected to continue, but a positive book-to-bill ratio for two consecutive quarters signals resilience.

• Cash flow from operating activities decreased 29% to SEK 735 million, reflecting lower earnings and less favorable working capital changes.

Financial highlights

• Net sales for Q2 were SEK 8,121 million, down 4% year-over-year; EBITA: SEK 1,115 million, down 11%.

• Gross margin stable at 35.3%; EBITA margin at 13.7% (14.8% last year).

• Earnings per share fell 12% to SEK 1.71–1.75; year-to-date EPS down 4%.

• Return on capital employed at 19%, slightly below last year and target.

• Free operating cash flow was SEK 610 million in Q2; cash conversion remains strong at 131% on a rolling four-quarter basis.

Outlook and guidance

• Cost adaptation efforts are ongoing, with expenses expected to decline further in Q3 and Q4.

• Backlog nearly restored to last year's level, indicating potential sales pickup in H2; long-term outlook remains optimistic with structural growth potential in key sectors.

• Market uncertainty is expected to continue, but a strong acquisition pipeline supports long-term sustainable, profitable growth.

• Life Science and Process Energy & Water segments have good order situations; Infrastructure & Construction faces continued challenges.

• Positive book-to-bill ratio for two consecutive quarters; companies are actively adapting costs to market conditions.