• Organic Order Intake Growth: 5% increase despite market uncertainty.
• Net Sales Growth: 4% total increase, flat organically.
• EBITA Margin: 13.6% including one-offs, 13.3% excluding one-offs.
• Operational Cash Flow: Record Q1 cash flow of SEK644 million.
• Gross Margin: Record high for Q1 at 35.4%.
• EBITDA: Increased 6% to SEK1.1 billion.
• Earnings Per Share: Increased 6% from SEK1.61 to SEK1.71.
• Return on Capital Employed: 19%.
• Net Debt-to-EBITDA Ratio: 1.3, historically low.
• Acquisitions: Three acquisitions completed with an annual turnover of SEK390 million.

• Warning! GuruFocus has detected 7 Warning Signs with FRA:4TS.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Indutrade AB (IDDWF) reported a 5% organic growth in order intake despite market uncertainties.
• Net sales increased by 4%, driven entirely by acquisitions, with a record Q1 operational cash flow of SEK644 million.
• The company completed three acquisitions in 2025, with a positive outlook for further acquisitions.
• The gross margin reached a record high of 35.4% for Q1, indicating strong management of direct material and labor costs.
• The net debt-to-EBITDA ratio was at a historically low level of 1.3, reflecting a strong financial position.

Negative Points

• Organic sales growth was flat, with some business areas experiencing declining sales due to a weaker business climate.
• The EBITA margin was slightly lower at 13.3% when excluding one-off items, indicating pressure on profitability.
• Higher expense levels were noted, partly due to increased activity and inflation, impacting margins negatively.
• The Process, Energy & Water business area saw a decline in EBITA margin due to organic sales decline and higher expenses.
• Sales in North America were down, attributed to difficult comparisons with larger projects from the previous year.

Q & A Highlights

Q: Can you elaborate on the gross margin and cost side, particularly the increase in costs compared to last year? A: Bo Annvik, CEO: We are pleased with the gross margin, which was a record high for Q1. The cost increase is partly due to strategic organic growth initiatives, such as product innovation and business development. Some companies may have been too focused on growth rather than cost management. However, the culture within Indutrade remains cost-conscious, and we expect improvements as companies align costs with market conditions.

Q: How do you anticipate the margin recovery to progress this year compared to last year? A: Bo Annvik, CEO: We expect Q2 to be better than Q1. The market situation is different this year, with some positive outlooks in certain segments and geographies. Despite the challenges, we anticipate a step change in profit margin between Q1 and Q2.

Q: Are there any concerns about potential tariff impacts and pre-buying behavior among customers? A: Bo Annvik, CEO: We have seen very little pre-buying behavior in our companies. While there have been reports of increased exports from certain regions, such as Irish pharmaceuticals to the US, it has not significantly impacted our typical Indutrade companies.

Q: Can you provide more details on the single-use demand within the Life Science segment? A: Bo Annvik, CEO: The demand for single-use production equipment has normalized post-COVID, with ongoing demand driven by other pharmaceutical and biopharma-related areas. The industry predicts underlying growth, and we are seeing signs of this trend continuing.

Q: How has the stronger Swedish currency impacted your operations and financials? A: Patrik Johnson, CFO: A stronger SEK generally means better purchasing power for our trading companies, which can positively affect margins. While some benefits are passed to customers, there is a slight positive effect on our operations. The stronger currency also results in a slight reduction in debt levels.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.