Mildef Group (MILDEF) Q2 2025 earnings summary

Executive summary

• Order intake surged 116% year-over-year in Q2 2025 to SEK 878 million, driven by both organic growth and acquisitions, with net sales up 27% to SEK 383 million, but profits fell due to postponed deliveries and lower organic sales.

• Integration of Rohde & Schwarz/roda is progressing well, supporting group performance, cross-selling, and expansion in the European market.

• Strategic shift up the value chain, expanding from hardware to include software, integration, and services, supporting higher margins and larger contracts.

Financial highlights

• Adjusted EBITA for Q2 was SEK 25.1 million (6.5% margin), with margin down year-over-year due to lower organic net sales.

• Free cash flow in Q2 was SEK 32.7 million, a significant improvement over Q2 2024, despite increased inventory and acquisition outflows.

• Underlying gross margin (excluding M&A/roda) reached nearly 58%, a record level, while total group gross margin was 46-47% due to the acquisition.

• Book-to-bill ratio stands at 1.78, with a record order backlog of SEK 3.2 billion, up 121-177% from Q2 2024.

Outlook and guidance

• Full-year 2025 outlook remains positive, with strong order backlog and robust H2 expected, supported by increased defense spending and NATO targets.

• Expectation of strong Q3 and Q4, with seasonality favoring the second half and potential upside from new contracts.

• Continued ramp-up in capacity, including a new Stockholm facility to quadruple production capacity.

• Long-term market growth expected due to increased European and NATO defense spending, with digitalization and data-driven solutions as key drivers.