Systemair (SYSR) Q2 24/25 earnings summary

Executive summary

• Q2 2024-25 delivered 2.6% organic growth, with net sales down 1.3% to SEK 3,145.6 million due to negative currency effects; operating profit rose 7.7% to SEK 346.9 million, and operating margin improved to 11.0% from 10.1%.

• All regions except Western Europe showed organic growth, with North America and India performing strongly.

• Major investments included new factories in Lithuania, Germany, and Italy, and the acquisition of PHEM Engineering in Malaysia.

• Notable project wins included the Delhi Metro expansion and a major retrofit in Norway, highlighting capabilities in large-scale and energy-efficient solutions.

• Systemair celebrated its 50th anniversary and completed several strategic facility expansions.

Financial highlights

• Net sales for Q2 were SEK 3,145.6 million, down 1.3% year-over-year, with organic growth of 2.6% and a negative currency effect of -4.3%.

• Gross margin improved to 37.3% from 33.9% year-over-year, driven by high factory utilization, product mix, and cost efficiencies.

• Operating profit reached SEK 346.9 million, with an operating margin of 11.0% (up from 10.1%).

• Profit after tax was SEK 235.7 million, slightly down from SEK 246 million last year, due to higher net financial costs.

• Free cash flow was SEK 323.8 million, with net debt reduced to SEK 1,019.7 million.

Outlook and guidance

• Order intake remains strong, with major projects supporting a positive outlook as interest rates fall and inflation targets are met.

• North America is expected to see continued growth, though recent gains are partly due to inventory normalization; mid-term prospects remain positive.

• Western Europe remains soft, but there is potential for recovery, which could further boost margins.

• Continued investments in capacity and production facilities in Lithuania, Germany, and Italy.

• M&A pipeline is robust, with increased activity and a dedicated head of M&A.