Sdiptech (SDIP) Q1 2026 earnings summary

Executive summary

• Net sales reached SEK 4.5 billion in Q1 2026, with organic growth of 7% year-over-year, excluding currency effects.

• Adjusted EBITA/EBITDA for the core business was SEK 964 million, with a margin of 21.3%.

• Nine divestments completed in Q1, with ten of eleven strategic review companies now divested, generating SEK 258 million in positive cash flow and incurring an SEK 84 million capital loss; one more divestment planned for Q2.

• Preference shares redeemed for SEK 184 million, streamlining capital structure.

• Strong demand and performance in Energy & Electrification and Safety & Security segments, each with over 14% sales growth excluding currency.

Financial highlights

• Adjusted EBITDA for the quarter was SEK 241 million, with a margin of 20.8%, slightly down due to weaker Water & Bioeconomy margins.

• Free cash flow and EPS declined from Q4 but remained higher than last year; cash conversion was poor in the quarter at 54% due to working capital buildup.

• Leverage reduced to 2.8 (including earn-outs and leasing); financial net debt leverage at 2.09.

• Return on capital employed reached 12.8%, up from 12.5% year-over-year, despite the capital loss.

• Adjusted EBITA margin for the group at 21.3%.

Outlook and guidance

• Positive outlook with a robust order book and ongoing strategic initiatives nearing completion.

• Focus remains on sustainable, long-term growth through organic expansion and acquisitions, with 4-6 acquisitions targeted for the year.

• Margins in Water & Bioeconomy expected to recover as operational improvements take effect.

• Currency headwinds anticipated to ease in coming quarters.