Fagerhult (FAG) Q1 2026 earnings summary

Executive summary

• Q1 performance and earnings were significantly below expectations due to weak construction activity, unfavorable sales mix, currency headwinds, and geopolitical instability, with net sales down 6.1% to SEK 1,821 million and EBITA before IAC dropping 72.9% to SEK 44 million.

• Order intake declined to SEK 1,969 million (down 14.6% organically), but order backlog increased to SEK 1,803 million, indicating stable underlying demand despite segment and geographic differences.

• Strategic review for 2026-2029 is underway and accelerated, focusing on profitability, stability, cost efficiency, and adapting to new market drivers such as defense, infrastructure, data centers, and regulatory mandates like EPBD.

• Cash flow from operating activities was negative SEK 160 million, mainly due to weak sales, increased working capital, and lower profits.

• Cost control measures and a strategic update are being implemented to reduce complexity and improve efficiency.

Financial highlights

• Order intake for Q1 was SEK 1,969 million, an organic decline of 14.6% year-over-year, mainly due to absence of large one-off orders.

• Net sales declined by 6.1% to SEK 1,821 million, or 8.8% adjusted for currency and acquisitions.

• EBITA before IACs was SEK 44 million, down 72.9% year-over-year, with a margin of 2.4% (vs. 8.4%).

• Earnings per share before IAC was -SEK 0.16 (vs. 0.43 last year).

• Operating cash flow was negative SEK 160 million, compared to SEK 26 million in the prior year.

Outlook and guidance

• No formal guidance provided, but underlying demand remains solid and order backlog is stable, with order intake exceeding sales by 8%.

• Market environment remains uncertain, with subdued construction activity expected to persist.

• Regulatory mandates (EPBD, EED, Taxonomy) are driving structural market expansion and non-discretionary demand for energy-efficient solutions, with phased deadlines through 2030.

• April started more positively than the beginning of the year, with no further deterioration observed.

• Strategic review results to be communicated by Q2, focusing on both cost efficiency and growth opportunities.