Ratos (RATO) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA/EBITA increased by 32% year-over-year, with all business areas improving profitability and operating profit up 71% to SEK 563m, driven by Plantasjen's reconstruction and streamlining efforts.

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

• Completed the divestment of airteam (closing expected mid-May/Q2), further focusing the business portfolio.

• Plantasjen's reconstruction delivered significant cost savings, SEK 60m EBITDA/EBITA improvement, and SEK 1,500m reduction in lease liabilities.

• Strong order intake and record-high order books in Construction & Services, supporting a positive outlook.

Financial highlights

• Adjusted EBITDA/EBITA increased by 32% to SEK 474m, with margin up 1.7 percentage points; operating profit up 71% to SEK 563m.

• Net sales declined 4% to SEK 7,535m; organic sales growth was -2%.

• 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%; LTM cash conversion at 114%.

• Leverage at 1.5x EBITDA, within the target range of 1.5–2.5x.

Outlook and guidance

• Focus on maintaining higher operating margins, stable cash flow growth, and fewer platforms, with continued value-creating add-on acquisitions.

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

• Strong order backlog ensures sufficient work for 2025 and beyond, with some orders extending into 2026 and 2027.

• 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.