MEKO (MEKO) Q1 2025 earnings summary

Executive summary

• Net sales increased by 6% year-over-year to SEK 4,562 million, mainly due to the Elit Polska acquisition, while organic growth was -1%.

• EBIT and adjusted EBIT rose in Q1 2025 despite a cautious market, with EBIT at SEK 161 million (up 10%) and adjusted EBIT at SEK 231 million.

• Gross margin remained stable, supported by price adjustments and procurement improvements.

• Strategic initiatives included accelerating the tire segment, launching a commercial vehicle division, expanding EV partnerships, and progressing high-tech warehouse projects.

• Cash flow from operating activities was negative SEK 122 million, mainly due to increased working capital and seasonal factors.

Financial highlights

• Net sales for Q1 2025 were SEK 4,562 million, up 6% from SEK 4,320 million in Q1 2024.

• Adjusted EBIT rose to SEK 231 million, with items affecting comparability totaling SEK 70 million, half related to ERP costs and half to warehouse project costs.

• Earnings per share decreased 8% to SEK 0.85; profit after tax was SEK 53 million.

• Gross margin held steady at 42.8% (42.9%) as price increases offset lower-margin volumes.

• Investments in fixed assets totaled SEK 1,527 million, mainly for new warehouses and automation.

Outlook and guidance

• Focus remains on long-term profitability via efficiency, synergies, and growth, with logistics upgrades and ERP rollout planned for 2025.

• Targeting over 30% increase in tire sales by end of 2026 through a strategic partnership with Goodyear.

• Continued cautious market expected, with some pent-up demand possible but timing uncertain, especially in Finland.

• Further margin-raising measures and cost reductions are planned in response to economic turbulence.

• Currency effects on gross margin will be delayed by 4–6 months; benefits in Sweden offset by weaker Norwegian krona.