Teqnion (TEQ) Q1 2025 earnings summary

Executive summary

• Six acquisitions completed in Q1, with one more in April, expanding UK and Swedish operations; this pace is not expected to continue in future quarters.

• EPS rose 73% year-over-year to 2.13 SEK, with profit after tax at 36.5 MSEK, mainly due to FX effects.

• Net sales increased 6% to 406.3 MSEK, but organic sales declined 2.7% year-over-year.

• Improvement projects and restructuring in struggling subsidiaries are starting to yield positive results, especially compared to a weak Q4.

• International operations now contribute a substantial share of earnings, with higher margins than Swedish businesses.

Financial highlights

• Q1 results benefited from favorable FX effects due to a stronger Swedish krona.

• EBITA margin decreased to 8.1% from 9.5% year-over-year, with EBITA at 33.0 MSEK.

• Sequential improvement in margins and cash flow compared to Q4.

• Return on equity declined to 13.7% from 21.9% year-over-year.

• Write-downs and inventory scrapping occurred as part of restructuring in some subsidiaries.

Outlook and guidance

• Targeting 15% annual growth: 10% from acquisitions, single-digit organic growth in a normal market.

• EPS goal is to double every five years, with a rolling five-year target.

• Expecting to maintain a pace of about five acquisitions per year, with potential for larger deals in the future.

• Focus remains on profitability, operational efficiency, and resilience amid ongoing market volatility.

• No formal forecasts or annual targets are provided; long-term value creation prioritized.