Karnov Group (KAR) Q1 2025 earnings summary

Executive summary

• Net sales increased 7% year-over-year to SEK 673 million, driven by strong online sales, pricing, and AI solution adoption.

• Adjusted EBITA/EBITDA margin improved to 26% from 22.7%–23% in Q1 2024, reflecting successful synergy initiatives and cost efficiencies.

• Free cash flow surged to SEK 245 million from SEK 107 million, with leverage reduced to 2.4x EBITDA, well below target.

• AI assistant adoption and usage increased, with major updates launched and further enhancements planned for 2025.

• Cost synergies from integration and initiatives are ahead of plan, with EUR 20 million total expected and annual run-rate synergies of EUR 16.7 million by end of Q1.

Financial highlights

• Net sales reached SEK 673 million, with organic growth of 2.7%–7.7% and acquired growth of 4.2%.

• Adjusted EBITA was SEK 175 million (up 21.7%–22% year-over-year), with a margin of 26%.

• Adjusted free cash flow for Q1 was SEK 245 million, up SEK 138 million from last year.

• Items affecting comparability were SEK 28 million, mainly due to integration and acceleration initiatives.

• Profit for the period reached SEK 77 million, up from a loss of SEK -12 million in Q1 2024.

Outlook and guidance

• Financial target for organic growth remains at 4%–6% annually; Region North continues to outperform this target.

• Additional AI assistant features to be launched in 2025, with continued efficiency gains expected.

• Cost synergies from integration and initiatives to continue, with full EUR 20 million effect expected over the period.

• Region South margin target is 16%, with ambitions to reach 17%–18% in steady state.

• No formal financial forecasts provided; future outcomes may vary due to market and regulatory changes.