STRATEGIC INITIATIVES AND STABLE DEMAND HEADING INTO H2

SECOND QUARTER 2025

• Net sales decreased by 4% to SEK 1,228 million (1,337) which for comparable units was a decrease of -4%, excluding currency effects.
• EBITA amounted to SEK 248 million (283), corresponding to an EBITA margin of 19.2% (21.2).
• Adjusted EBITA amounted to SEK 242 million (268), corresponding to an adjusted EBITA margin of 18.8% (20.1). Organic adjusted EBITA decreased by -9%, excluding currency effects.
• Profit before tax for the quarter amounted to SEK 138 million (177). Profit after tax amounted to SEK 92 million (127) and earnings per share amounted to SEK 2.31 (3.20).
• Cash flow from operating activities amounted to SEK 121 million (196), corresponding to a cash conversion of 45% (82), primarily affected by operations with recognition of project-based sales, as well as some operations with temporary inventory build-up for upcoming large deliveries.

FIRST SIX MONTHS 2025

• Net sales amounted to SEK 2,618 million (2,620) which for comparable units was a decrease of -3%, excluding currency effects.
• EBITA amounted to SEK 503 million (540), corresponding to an EBITA margin of 19.2% (20.6).
• Adjusted EBITA amounted to SEK 493 million (520), corresponding to an adjusted EBITA margin of 18.8% (19.9). For comparable units an adjusted EBITA decrease of -8%, excluding currency effects.
• Profit before tax amounted to SEK 262 million (338), profit was affected by unrealised exchange rate differences of SEK -28 million (1) and increased interest expenses. Profit after tax amounted to SEK 165 million (237) and earnings per share amounted to SEK 4.14 (5.99).
• Cash flow from operating activities amounted to SEK 323 million (368), corresponding to a cash conversion of 58% (77).

COMMENTS BY THE CEO

The second quarter was challenging with a continued wait-and-see market and an uncertain global economy. Both net sales and profit development in adjusted EBITA decreased organically by 4 and 9 percent, respectively, excl. currency effects. This resulted in an adjusted EBITA margin of 18.8 percent. We are now implementing numerous important strategic initiatives and measures to secure good development going forward in our core business.

While several of our companies showed good growth during the quarter, others were affected by a weaker market. The general uncertainties in the world also led to customers choosing to postpone order placement until Q3. In addition, a couple of units had high comparative figures from Q2 2024. Cash flow was also weak during the quarter, mainly due to operations with recognition of project-based sales, as well as a temporary inventory build-up in a couple of companies that are facing upcoming large deliveries.

With all this said, we demand more from ourselves as an organization. As the newly appointed CEO, I have, together with the management, clarified a number of strategic initiatives and measures that will take us back to stable organic growth and increased return on capital employed.

Firstly, we are strengthening the business area organization with increased experience and knowledge of our main segments, which enables more long-term strategic work with these companies where we can identify and implement measures that over time ensure organic growth. We have already recruited a new business area manager for our largest business area, Supply Chain & Transportation. We have also begun a new recruitment process to strengthen our presence in our largest market, the UK. This is an important step to further support our companies, especially within the Energy & Electrification business area.

We have also accelerated the already communicated strategic review of our operations. This is part of our ambition to allocate capital and resources more efficiently, while allowing us to focus on the operations with the strongest long-term potential and are reflecting our strategy. As a result, we have identified a group of companies for which we intend to find new long-term owners. These companies, all acquired before Sdiptech's strategic shift in 2018/2019 and which do not meet our since then established criteria, account for approximately 15 percent of our sales, but only approximately 5 percent of our adjusted EBITA.

As of Q3, these companies will be reported separately. In connection with this, a revaluation of goodwill and other intangible assets will also be carried out. This will show a higher return on capital employed within the core business, while the result will be impacted by a non-cash one-off effect of SEK 400–500 million. We can also note that the organic development in net sales and adjusted EBITA for the core business was +0.4 and -2.8 percent, respectively, excl. currency effects for the first half of 2025. This compares with the total reported organic net sales and profit development in adjusted EBITA for the same period of -3.0 and -8.2 percent, respectively. A more detailed description of the estimated effects from this separate reporting can be found on page 7 of this report.

In parallel with the above-mentioned activities, our acquisition activities continue at a good pace, and we expect to be able to welcome new high-quality companies to the group during the second half of the year. Our target for 2025 is to acquire an annual EBITA on a rolling twelve-month basis of approximately SEK 100 million.

The core business, consisting of a well-diversified group of companies acquired based on our current strict criteria, accounts for 95 percent of our profit. These companies are well-positioned to develop steadily and create long-term value. After a challenging start to the year, we are seeing signs of recovery heading into the second half. Underlying demand is considered healthy, and several of our units enter the period with cautiously positive market outlooks.

Finally, I would like to extend a big thank you to all our dedicated employees for your commitment. As the new CEO, I look forward to leading the company together with you towards organic profit growth and increased return on capital.

Anders Mattson,
President and CEO

For additional information, please contact:
Bengt Lejdström, CFO, +46 702 74 22 00, bengt.lejdstrom@sdiptech.com  
My Lundberg, Head of Sustainability & IR, +46 703 61 18 10, my.lundberg@sdiptech.com