Coor Service Management (COOR) Q4 2024 earnings summary

Executive summary

• Stable market conditions in Q4 2024, but profitability was negatively impacted by operational challenges in Sweden and Denmark and a complex organizational structure.

• Major contract renewals and new wins, including PostNord, Borealis, and Telenor Towers, contributed to a strong pipeline and an 88% contract retention rate on renegotiated contracts worth SEK 2.9 billion.

• Implementation of a simplified organization, reducing 130 positions and targeting SEK 120 million in annual savings, effective from April 2025.

• Board proposes a dividend of SEK 1.50 per share and a share buyback program of up to SEK 50 million, together totaling 100% of adjusted net profit.

• CEO transition: AnnaCarin Grandin left, Peter Viinapuu appointed interim CEO as of December 2024.

Financial highlights

• Q4 organic growth at -3% (vs. 3% in Q4 2023); full-year organic growth -1%.

• Q4 net sales: SEK 3,192 million (down 3% year-over-year); full-year net sales: SEK 12,439 million (flat year-over-year).

• Q4 adjusted EBITA/EBITDA: SEK 105 million (3.3% margin, down from 5.1%); full-year adjusted EBITA/EBITDA: SEK 546 million (4.4% margin, down from 4.9%).

• Q4 net income: -13 MSEK; full-year net income: 126 MSEK; adjusted net income for the year: 193 MSEK.

• Cash conversion (LTM) at 57% for the full year, down from 86% last year and below the 90% target.

• Leverage ratio at 3.0x (up from 2.5x), with a goal to reduce below 2.5x in 2025.

Outlook and guidance

• Measures to restore profitability and working capital, including organizational simplification, are expected to show results in 2025.

• Long-term margin target of 5.5% for full year 2026 remains unchanged.

• Cash conversion expected to normalize in 2025 as temporary working capital effects are addressed.

• Confident in restoring working capital and reducing leverage below 2.5 during 2025.