Ratos (RATO) Q1 2025 earnings summary

Executive summary

• Adjusted EBITA/EBITDA increased by 32% year-over-year, with improvements across all business areas and record-high order intake in Construction & Services.

• Net sales declined 4% to SEK 7,535m, mainly due to discontinued operations and negative calendar or currency effects.

• Completed Plantasjen's reconstruction, resulting in significant cost savings, improved EBITA, and reduced store count and lease liabilities.

• Divestment of airteam finalized, further focusing the business portfolio and expected to generate SEK 1.2bn.

• Profit for the period increased to SEK 342m, with adjusted diluted EPS at SEK 0.37 and diluted EPS at SEK 0.76.

Financial highlights

• Adjusted EBITA reached SEK 474m (up 32%), with margin up to 6.3%; operating profit up 71% to SEK 563m.

• Net sales: SEK 7,535m (down 4%); Product Solutions segment grew sales by 9%.

• Cash flow from operating activities was SEK -285m, mainly due to changes in net working capital and a SEK 200m composition dividend.

• Last 12 months' cash flow reached SEK 3.3bn with a cash conversion of 135%.

• ROCE improved to 10.8% from 10.4% year-over-year.

Outlook and guidance

• Focus remains on value-creating add-on acquisitions, high-margin platforms, and improving operating margins and return on capital employed.

• New financial targets to be released in the second half of 2025.

• Management is positive about Plantasjen's future development.

• Streamlining continues with divestments and robust order intake supporting future growth.

• Uncertainty persists due to macroeconomic and geopolitical risks, but the company is well positioned for growth.