Karnov Group (KAR) Q1 2025 earnings summary

Executive summary

• Net sales increased 7% year-over-year to SEK 673 million, driven by strong online sales, pricing, and AI solution adoption.

• Adjusted EBITA/EBITDA margin improved to 26% from 22.7% in Q1 2024, reflecting successful synergy realization and cost-efficiency.

• Free cash flow surged to SEK 245 million from SEK 107 million, with leverage reduced to 2.4x EBITDA.

• AI assistant adoption accelerated, with major feature updates launched and further enhancements planned for 2025.

• Region North delivered strong growth and profitability, while Region South faced weak offline sales, particularly in Spain.

Financial highlights

• Net sales: SEK 673 million (up from SEK 632 million in Q1 2024); organic growth 2.7%, acquired growth 4.2%.

• Adjusted EBITA/EBITDA: SEK 175 million (up 21.7% year-over-year); margin 26.0% (22.7%).

• Adjusted free cash flow: SEK 245 million (SEK 107 million in Q1 2024).

• Leverage: 2.4x (improved from 2.7x in Q1 2024), below target.

• Annual run-rate synergies reached SEK 186 million (EUR 16.7 million); Q1 synergies effect SEK 41 million.

Outlook and guidance

• Ambition to achieve annual run-rate synergies of EUR 20 million (SEK 230 million) by end of 2026, with EUR 17 million already realized.

• Additional AI assistant features to be launched in 2025, with continued efficiency gains expected.

• Region North expected to maintain above-target growth, supported by new AI products and EHS expansion.

• Region South targets a 16% margin, with ongoing cost focus and product rationalization in Spain.

• France expected to deliver 4%-6% top-line growth in 2025 and 2026.