Lagercrantz Group (LAGR) Q3 24/25 earnings summary

Executive summary

• Net revenues for Q3 increased by 20% year-over-year to MSEK 2,462, driven by 16% acquired and 3% organic growth, marking a return to positive organic growth after previous negative quarters.

• EBITA rose 21% to MSEK 428, with a stable margin of 17.4%; profit after tax grew 19% to MSEK 267.

• Order intake slightly exceeded invoiced sales, resulting in a book-to-bill ratio above one, indicating improving demand.

• Eight acquisitions since Q3 last year, adding about MSEK 1,320 in annual revenues; several new businesses added and more pending.

• Proprietary products now account for 78% of sales, with a target to reach 85% in coming years.

Financial highlights

• Q3 net revenues: MSEK 2,462 (+20% YoY); EBITA: MSEK 428 (+21% YoY); EBITA margin: 17.4%.

• Nine-month net revenues: MSEK 6,887 (+15% YoY); EBITA: MSEK 1,200 (+15% YoY); EBITA margin: 17.4%.

• Profit after tax increased 19% in Q3; cash flow from operations improved by 32% to MSEK 484.

• Earnings per share (diluted) improved to SEK 4.61; return on equity steady at 28%.

• Cash flow from operations for nine months: MSEK 980.

Outlook and guidance

• Long-term ambition to achieve annual profit growth above 15%, doubling profits every five years.

• Growth strategy targets one-third organic and two-thirds acquired growth, aiming for at least 10% annual growth from acquisitions.

• Construction sector expected to remain sluggish in the near term, with recovery anticipated later in 2025 as interest rates decline.

• Acquisition pace expected to remain strong in the short term, with a robust pipeline and several attractive targets under evaluation.

• Market conditions remain stable overall, with recovery in Sweden, Denmark, Norway, and the UK, but continued sluggishness in Germany and Finland.