CEO’s statement

The fourth quarter was characterized by a continued cautious market for property owners’ and housing associations’ willingness to invest, with a corresponding impact on the company’s operations in pipe lining and energy. The market for these areas continues to strengthen, although the energy side saw delays in ongoing projects over the year-end. As seen earlier in the year, the coil business continued to develop strongly with stable demand from customers with ongoing maintenance needs.

Net sales amounted to SEK 238.6 (274.7) million, a decrease of 10.2 percent on a comparable and currency-adjusted basis adjusted for discontinued operations. The decrease is fully explained by lower activity in pipe feeding and energy. The adjusted EBITA margin improved to 5.3 (4.3) percent thanks to an overall good development in the coil business and continued improvement in Finland. Our focus on trimming the business resulted in an 11.1% reduction in running indirect costs compared to last year, a level improvement that we carry into the new year. However, further improvements in this area remain possible.

In 2024, we navigated a challenging market that gradually improved during the year. Despite this change in trend in a moderately positive direction, the level of activity for the year was lower, mainly because the energy and pipe lining businesses are working on planned deals that take some time to execute and generate revenue. For the year as a whole, net sales amounted to SEK 918.5 (956.1) million, a decrease of 5.3% on a like-for-like and currency-adjusted basis adjusted for discontinued operations.

Geographically, Denmark and Norway contributed positively to the results compared to the previous year, while Sweden and Finland showed a weaker development. The coil business had a strong year with both increased net sales and margins. As we have mentioned many times before, this reflects the market well as property owners’ restraint in investing in planned maintenance has a direct impact on the need for ongoing maintenance. This also leads to pent-up demand, which suggests a much stronger demand for pipe lining and energy in the coming years.

Despite a challenging market, our focus on profitable businesses and operations has paid off. Gross margin increased to 34.7%, compared to 34.5% last year and 34.3% in 2022. Our work on running indirect costs, which decreased by 5.7% during the year, had some positive impact but could not fully compensate for the lower activity level. All in all, this resulted in a lower adjusted EBITA margin for the year as a whole, 4.0% compared to 6.1% last year. The lower adjusted EMITA margin can be fully explained by negative economies of scale due to market conditions during the year. However, continued improvement in gross margins and lower indirect costs provide good opportunities for rapid improvements in an expected stronger market situation going forward.

In light of developments in the first quarter of the year, the company’s assessment is still that sales development and profitability will gradually improve during the second half of the year, but that it may be difficult for the company to make up for the loss of sales in the first half of the year compared with the previous year. This is a more cautious assessment than previously, as the company has predicted cautious growth during the year for comparable units.