Teqnion (TEQ) Q2 2025 earnings summary

Executive summary

• Market conditions in the first half of 2025 were slow, with challenges in generating orders and sales, prompting organizational changes and new performance measurement approaches.

• Net sales increased 19% year-over-year to 474.5 MSEK, but organic growth declined 3% as acquisitions drove most of the topline expansion.

• Seven new companies were acquired, strengthening the U.K. presence with five acquisitions and adding two in Sweden, expanding the group to 36 operating companies.

• Operational earnings and free cash flow were weak and flat year-over-year, excluding positive earnout effects.

• Leadership remains optimistic about improvements filtering through in the coming quarters, with ongoing restructuring and new country managers to drive sustainable returns.

Financial highlights

• EBITA margin was 11.3% (down from 11.7% year-over-year); EBITA reached 53.7 MSEK, up 15%.

• Free cash flow (excluding acquisitions) was very low at 4.5 MSEK, down sharply from 32.4 MSEK in Q2 2024, due to increased inventories and higher trade receivables.

• Approximately one-third of subsidiaries are currently loss-making, but trends are improving.

• Four turnaround companies lost SEK 14 million in H1 2025 but are expected to contribute SEK 2–5 million in profit by year-end.

• Cash and cash equivalents at period end were 137.4 MSEK, with total interest-bearing liabilities at 549.9 MSEK.

Outlook and guidance

• Management expects the impact of operational improvements to become evident in the second half of the year, with a brighter outlook for the fall.

• Action plans for underperforming subsidiaries are in place, with profitability expected to improve by year-end.

• The goal remains to double EPS every five years.

• Q4 is expected to see small profits from turnaround companies, with further profitability improvements targeted.