Arjo (ARJO) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered 3.4% organic net sales growth, with strong order intake and improved market conditions in Europe and North America, especially the US and Canada.

• Gross margin improved to 43.7% from 43.5%, supported by favorable geographic mix, price adjustments, and lower material costs.

• Profitability was impacted by currency headwinds and higher OpEx, despite cost efficiency initiatives.

• New product launches, including Maxi Move 5 and Symbliss, and a strengthened order book support long-term competitiveness.

• Executive team changes and restructuring in China contributed to higher restructuring costs in Q1.

Financial highlights

• Adjusted EBITDA was SEK 486 million, down from SEK 502 million last year, with underlying EBITDA up 6% when neutralized for FX.

• Adjusted EBIT margin decreased to 7.3% (SEK 208 million), mainly due to FX; adjusted for FX, EBIT grew 4%.

• Operational cash flow was SEK 184 million, with cash conversion at 41.3% (seasonally low for Q1).

• Net debt increased slightly to SEK 4.3 billion, with leverage (net debt/EBITDA) at 2.1.

• Net investments totaled SEK 215 million, mainly in tangible assets and rental fleet expansion.

Outlook and guidance

• Organic net sales growth for 2025 is expected within the 3%-5% target range.

• Profitability is significantly impacted by currency effects, but underlying business trends remain positive.

• No change to the full-year outlook; focus remains on mitigating external headwinds, including tariffs and FX.

• Continued focus on cost efficiency, product launches, and adapting to macroeconomic challenges.