VBG Group (VBG) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales declined 12% year-over-year to SEK 1,351.3 M, mainly due to reduced demand in North America and Europe, with the largest impact in Mobile Thermal Solutions, US transit bus, and European semi-trailers.

• Sales outside Europe and North America grew by 25%, helping to balance the geographic footprint.

• Operating profit (EBITA) fell to SEK 177.4 M (13.1% margin), down from SEK 259.5 M (16.9%) in Q1 2024.

• Two strategic acquisitions were completed: Italytec in Brazil (HVAC systems) and Ledson Lights AB (vehicle lighting), broadening market presence and supporting long-term growth.

• Gross profit margins were maintained despite lower sales, attributed to efficiency improvements and cost control.

Financial highlights

• EBITDA margin was 13.1%, down from 16.9% in Q1 2024; EBITDA for Q1 2025 was SEK 208.4 M, down from SEK 282.9 M.

• Organic growth was -12.9% year-over-year, with all divisions experiencing declines.

• Cash flow from operating activities dropped to SEK 27.9 M from SEK 144.1 M a year earlier, mainly due to lower results and higher working capital tied up in accounts receivables.

• Net debt position (adjusted for pensions and leases) was SEK 163 million at quarter-end; consolidated interest-bearing net debt increased to SEK 641.7 M.

• ROCE decreased from nearly 40% in Q1 2024 to 34.1%, mainly due to the Toronto land acquisition and lower EBITDA.

Outlook and guidance

• Market volatility and geopolitical uncertainty, especially US tariffs, remain key risks.

• Modest price increases (low single-digit for off-road, mid-single-digit for bus segment) will be implemented from May 1, 2025, to offset higher input costs.

• Order intake at quarter-end was on par with Q1 2024, signaling potential stabilization; order book is stable and management remains cautiously optimistic for Q2 and beyond.

• No formal forecast provided for 2025.

• Targeting one to three acquisitions per year and continued investment in organic growth.