Terranor Group (TERNOR) Q2 2025 earnings summary

Executive summary

• Achieved 12% revenue growth in Q2 2025 to SEK 849 million, driven by new contracts in Sweden and Finland, with Sweden as the main growth engine.

• Successfully listed on Nasdaq First North Growth Market in June 2025, marking a significant milestone and enabling further growth.

• Adjusted EBITA more than doubled year-over-year in Q2, reaching SEK 16.9 million, reflecting improved contract terms and operational efficiency.

• Specialization in road operations and maintenance provides a competitive advantage, with 90% of revenue from state and municipalities.

• Four major state contracts renewed in Denmark (790 MSEK over four years) and a new municipal contract signed.

Financial highlights

• Q2 revenue reached SEK 849 million, up 12% year-on-year, driven by new profitable contracts, especially in Sweden and Finland.

• Q2 adjusted EBITA was SEK 16.9 million (up 128%), with a 2% margin, and adjusted EBITDA was SEK 17 million (2% margin), up 1 percentage point from last year.

• Q2 EBITA: -14.6 MSEK (down from 5.4 MSEK), mainly due to IPO-related costs.

• Q2 operating cash flow was negative SEK -30 million, impacted by IPO-related one-off costs.

• Adjusted operating cash flow for H1: 92.1 MSEK (up from 31.4 MSEK).

Outlook and guidance

• Q3 and Q4 are expected to be even stronger due to seasonality and increased extra works.

• Underlying earnings power will be more visible from Q4 as IPO-related one-offs subside.

• Financial targets remain: annual revenue growth of at least 8%, adjusted EBITDA margin above 5%, dividend payout ratio of at least 50% of net profit, and net debt/EBITDA not exceeding 2.5x.

• Market demand for road maintenance expected to remain strong, supported by long-term structural trends.

• IPO-related non-recurring costs expected to impact Q3, with normalization anticipated thereafter.