Nobia (NOBI) Q2 2025 earnings summary

Executive summary

• EBIT, EBIT margin, and operating cash flow improved year-over-year despite lower net sales, driven by cost-saving programs and strategic initiatives.

• Group net sales declined organically by 5% to SEK 2,695m, mainly due to lower volumes and UK store closures, while the consumer segment showed growth.

• Strategic focus remains on cost efficiency, ramping up the Jönköping factory, and transitioning UK operations to an asset-light model.

• Cost-saving programs delivered SEK 80 million in Q2 savings, with run-rate savings surpassing SEK 600 million, above plan.

• Market conditions remain soft, especially in the UK and project segments, but the consumer market shows gradual recovery.

Financial highlights

• Gross margin was 38.8% in Q2 (down from 39.4% year-over-year), mainly due to higher depreciation and lower volumes in the Nordics.

• Adjusted EBIT increased to SEK 68m from SEK 42m, with EBIT margin in the Nordics improving to 8.9% despite sales decline.

• Cash flow from operating activities was SEK 236 million, up from SEK 165 million last year; operating cash flow including investments was SEK 100 million, SEK 150 million better year-over-year.

• Net debt (excluding leasing and pension) increased to SEK 2,499m from SEK 1,934m, mainly due to investments in the new factory.

• EBITDA margin increased to 6.5% from 2.6% year-over-year.

Outlook and guidance

• No material change expected in the project market during 2025, which remains at historically low levels.

• Gradual recovery in the Nordic consumer market expected to continue, supported by lower interest rates and government grants.

• Margin improvement in Nordics expected to continue; UK operations transitioning to asset-light model to improve profitability.

• Full ramp-up of Jönköping factory expected to add 3.5% to gross margin and provide high operational leverage as volumes recover.

• Strategic priorities include ramping up Jönköping factory, UK turnaround, and ongoing cost reductions.