Alligo (ALLIGO) Q1 2025 earnings summary

Executive summary

• Revenue increased by 2.9% year-over-year to MSEK 2,232, driven by acquisitions, while organic growth was -2.5% due to weak demand, especially in Sweden.

• Adjusted EBITA fell to MSEK 74 from MSEK 84, with margin declining to 3.3% from 3.9%, impacted by lower volumes and negative country mix.

• Cost reduction programs totaling SEK 100 million were initiated, including shop closures and personnel reductions, with main effects expected from mid-2025.

• The ReCare workwear service was launched in Sweden, with plans to expand to Norway and Finland by year-end.

• Acquisition of Svenska Batterilagret AB added 27 stores, contributed MSEK 43 in revenue and MSEK 10 in adjusted EBITA, and was completed in February 2025.

Financial highlights

• Organic growth was -2.5%, while acquisition-driven growth was 7.8%.

• Gross margin slightly decreased to 40.9% from 41.1% year-over-year, diluted by lower-margin acquired businesses.

• Operating cash flow was SEK -38 million, impacted by inventory buildup and ERP-related invoicing delays in Norway.

• Net debt increased to SEK 2 billion, with a net debt/EBITDA ratio of 2.9 (excl. IFRS 16).

• Profit after tax was MSEK 17 (MSEK 23), with EPS at SEK 0.34 (SEK 0.46).

Outlook and guidance

• Strategic focus remains on sales growth, cost efficiency, and margin protection, with new sales and marketing initiatives underway.

• Management expects gradual improvement as market signals turn positive, with cost savings and new initiatives supporting future profitability.

• The cost reduction program's main effects will be seen after summer, stabilizing the cost base.