Ratos (RATO) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered 3.4% organic growth, adjusted EBITA up 14% to SEK 988m, and margin at 17.3%, with nearly all portfolio companies improving year-over-year, notably Diab and Speed.

• Strong cash flow and cash conversion above 100%, supported by operational improvements, M&A insurance proceeds, and Sentia sell-down.

• Continued execution of the 2030 strategy, including portfolio focus, divestments, and add-on acquisitions such as HL Display's acquisition of UFO Display Solutions.

• Strengthened board expertise with external senior leaders in key portfolio companies.

• Profit for the period nearly doubled to SEK 1,097m, driven by divestments and insurance compensation.

Financial highlights

• Net sales reached SEK 5,703m in Q2 2026 (+2% year-over-year), with organic growth of 3.4%.

• Adjusted EBITA rose 14% to SEK 988m, margin at 17.3%, and adjusted EPS increased up to 36% to SEK 1.97.

• Underlying operational cash flow grew ~20%, reported cash flow up 40% year-over-year, and cash conversion above 100%.

• Net debt/EBITDA reduced to 1x, with leverage (excl. leases) at 0.8x and equity ratio at 57.6%.

• Return on capital employed (ROCE) at 7.3%-8.6%, with Diab at 14.8%, HL Display at 20.3%, and TFS at 16.9%.

Outlook and guidance

• Focus remains on sustaining profitable, capital-efficient growth through organic initiatives and strategic add-ons.

• Market sentiment for industrial services remains cautious but shows signs of stabilization.

• Diab's high growth and margins expected to moderate as one-off benefits tail off in 2026.

• Continued emphasis on executing divestment plans for non-core consumer brands and investing in core platforms.

• Strong financial position supports further acquisitions and organic investments.