Hello and welcome to Enersense International Oyj's half-year financial report webcast. I'm Liisi Tamminen from Enersense International Oyj's communications team, and with me, I have our CEO Kari Sundbäck and CFO Jyrki Paappa. At the end of the presentations, we will have a Q&A session, so please write down your questions already during the presentations. I will now hand over to Kari, who will present the highlights of our first half-year.
Thank you, Liisi. Welcome everybody on my behalf to our half-year financial report. During this half-year and also during quarter two, our EBITDA improved significantly, and our strategic shift proceeded with significant and big steps. As Liisi mentioned, here's the program. I will start with the highlights from the April-June period. Jyrki will provide a financial review, and then I will conclude with a few notes on our way forward, and then we will engage with you in a Q&A. An eventful Q2, our EBITDA improved significantly. The order backlog for our core businesses turned to growth. After three quarters of decrease, we have now turned the order backlog to growth. The value uplift program, which we launched at the beginning of the year, has started faster and with better results than we initially targeted, and we are now updating the target for the whole program.
We will come back to this, of course, also during the presentation. At the beginning of June, we launched our updated core business strategy. We have been working on that during the first half of the year, and at our Capital Markets Day on June 4th, we launched it. The strategic focusing of Enersense, which started in June 2024, came to a conclusion right after quarter two with the sale of the marine and offshore unit at the beginning of the month of July. Some key financial figures from second quarter. Our core business revenue landed at EUR 74.8 million, which is some 9% down from last year. It is less down than quarter one compared to quarter one 2024, so there also, we have reversed the trend.
The adjusted EBITDA for the core businesses landed at EUR 3.1 million, so in line with a slight revenue decrease, it came down from quarter two last year. However, there also the relative margin, so the EBITDA margin of our core businesses turned to growth sequentially comparing to quarter one this year. The EBITDA for the whole company ended at EUR 2.9 million, whereas it was EUR 9.5 million negative a year earlier, a substantial improvement there. The equity ratio continued strong at a very different level than it was a year ago. We are now at 22%. Group EBITDA in total landed at EUR 2.9 million, which indeed is very different from the minus EUR 9.5 million in quarter two 2024. The revenue, we can clearly see that the strategic focusing of Enersense is coming to a conclusion in line with the targets given in June 2024.
In quarter two, we only had very little revenue from non-core businesses left. The decrease in the dark blue non-core businesses came from the significant decrease of revenue from the marine and offshore unit, which now then from July onwards is no more part of Enersense. All of our businesses now of the orange type of the core business, and as you can see, it is growing from quarter one this year. The revenue split starts to reflect our strategic focus. Here on the upper part of the page, we have the revenue split throughout last year, 2024, and in the lower part in the review period, Q2. In terms of business units, the share of energy transition was slightly larger in Q2 this year compared to the whole year 2024. The share of services was larger in quarter two this year compared to the full year 2024.
In the geographical regions, the share of Finland was practically the same at 60%, but the relative share of the Baltics and other Nordic countries shifted such that the share of other Nordic countries has grown and the share of Baltics has decreased, which is natural following the large transition projects in the electricity grid of the Baltics that came to conclusion at the beginning of this year and generated a lot of revenue in 2024. The order backlog of our core business now turned to growth in the second quarter. We have been refocusing Enersense for the past three quarters since summer last year, which has also shown in a slight decrease in our order backlog until now. From quarter two 2025 onwards, we have now returned to growth in our order backlog. Importantly, the orders are much more focused and are building our sustainable growth along our strategy.
A few examples of new orders we signed in the quarter. The first is from the energy transition business. We're responsible with a multi-year contract for the maintenance of the new wastewater treatment plant in Tampere, which replaces a few existing and out-of-lifecycle plants are being replaced with this new one, which we will maintain with a multi-year agreement. The second example here is a back-to-business in the Lithuanian electricity grid. We landed a deal to reconstruct a power transmission line. Design and commissioning and replacement of an old transmission line with a new one. The third one is also from energy transition, and this time in Sweden. A significant contract at the subsea cable manufacturing facility installing pipes in a high tower to cool the tower during the manufacturing process.
The fourth one is from the Power business, continuing our strong performance in substations in Finland. We are building a new one for Fingrid in the municipality of Yi. Last week, we updated our guidance for 2025. We now provide a range for the adjusted EBITDA for the core business, and we expect to land between EUR 16 million and EUR 20 million by the end of the year. This strategic shift progressed in big steps with the completion of the third and last of the strategic evaluations initiated in June 2024. The marine and offshore unit, the yard in Mantyluoto, Pori, we sold it to Davy, which is part of the Inosea Group, a shipbuilding group.
Our professionals, who are professionals in this industry, have now found a new home in a group of like-minded professionals and can continue to grow the unit professionally and the people personally as part of the Davy Group. We recorded a profit of approximately EUR 2.5 million at the closure of this. We signed it on July 8th, and we also closed it during the same week at the end of the week on July 11th. With this, indeed, all the strategic assessments initiated in June 2024 are now completed, and we can fully focus on our core business. I will return to the way forward in this core business after a financial review by Jyrki.
Okay, thank you, and good afternoon from my side also. Let's move forward and start this financial review from revenue. Kari already presented this slide. Our core business revenue came down by 9.8%, and I will comment on each business unit later in this presentation. This picture is very important. Whole half one from this year and group EBITDA improvement. We were starting from minus EUR 5 million last year. Our project development sale, so meaning wind and solar power development portfolio, it improved EBITDA by EUR 22.4 million. In the previous year, we had one-off type wind power income of EUR 6.9 million. Also during Q1 this year, we were having zero emission transport ramp down costs of EUR 2.9 million. Marine and offshore especially made a big improvement from heavy losses in Q1, sorry, half one last year compared to profitability in this year. That improvement totally was EUR 15 million.
We have been doing quite heavy work with the strategy and investing a lot for the future. The effect of that strategy value uplift program during half one has been close to EUR 3 million. Core business improvement on top of that has been EUR 4.5 million. We are ending up to EUR 24.1 million. As you remember, last year, the restructuring start was heavy for our balance sheet. Now the story is quite opposite. Our earnings per share was EUR 0.9 per share during the first half. EBITDA for the core business, dark orange, is showing headline EBITDA development from minus EUR four to close to zero. Actually, we were at the level of minus EUR 200,000. This next slide opens it a bit more. Power business unit improved by EUR 5.3 million. Energy transition was a little bit weaker as well as connectivity.
During Q1, the strategy and value uplift program was the investment there was EUR 2.5 million. Otherwise, administration managed to improve by EUR 1.8 million. Totally at the level of EUR 200,000 during Q2. Now let's start the business unit part from power. You can see revenue declined there. Decline was 17%. It came mostly from the project side, from the transmission line project and also the renewables. Service and maintenance part of power business was stable. Moving to EBITDA side, you can see that the negative effect from this zero emission vehicle has vanished. No dark blue anymore. Orange is improving this by this EUR 5.3 million ending to EUR 3.1 million. The improvement is coming that there was less one of the type of costs and also improved margin in high voltage line Baltics and substations in Finland. Moving on to energy transition.
There, as already Kari was telling you, the offshore, which is big dark blue in the previous year, is almost completely zero. Otherwise, the core business is coming also down by 10%. The market there has been quiet, and investments have been postponed. We were having a couple of maintenance centers less as we closed them earlier. Moving on to EBITDA side, dark blue part from heavy losses to the positive side, that's marine and offshore. We managed to squeeze out before sale quite nice profitability from there. The core business was slightly decreasing, and there it comes from maintenance centers. Project activity has been lower. Last business unit is connectivity. There, the growth is 5% compared to the previous year, and it's coming from both fixed line projects and also fiber optic networks construction. EBITDA is quite stable, some volatility in margins in their typical variety.
Moving on to balance sheet, net gearing decreased significantly and is at the level of 91% now. Equity ratio has been moving up, and we are at the level of 22%, as Kari already started the presentation. Last page of my presentation is this value uplift program, and I'm very satisfied that we can deliver results faster and bigger savings than expected. As you remember, we are having three parts in there: procurement part, improvement of commercial management, and also evaluation of fixed costs and resources. We started from the procurement side. It's moving well. Now we have moved and started also this third part, and the outcome of that will follow. At the end of Q2, we were on the run rate level of savings and efficiency improvement by EUR 2.5 million. Our first target for the whole program was EUR 5 million.
Now we are thinking and assuming that we will reach that level already at the end of this year, and we have lifted up our target up to EUR 6.5 million. That was my part, and now it's Kari's part.
Thank you, Jyrki. Let us then go to our way forward beyond Q2 this year. We launched our lifecycle partner strategy in June. We focus on our customers' success to shape our ambition. That comes with a twofold approach to become their trusted lifecycle partner. We earn their trust with efficiency and transparency in the work we already have, and we continue to do that type of work. We use the trust to deliver larger outcomes through solutions that then yield lifecycle performance in the shape of sustainability performance of value from their asset lifecycle. We have significantly refocused our portfolio, and it starts to show also in the quality of our order book, which in terms of volume, again, has started to grow also.
We focus on offering across the asset lifecycle in different phases of design, construction, operation, maintenance, modernization for power, energy production, industrial energy transition, and connectivity customers, and in three geographical areas being Finland, the Baltics, and Nordics. We have three key development areas: the performance of our large volume business through the project and service delivery models performance, their development, and especially their digitalization, our solutions capability development, providing also sustainability performance to our customers, and value capture across the offering and the key customer segments. We are a community which we aim to be such that experts choose us. We are competing for professionals, and we want to be the company that professionals choose to develop themselves. We launched strategic targets along with our strategy. We target a compound annual growth rate during the strategy period between 4% and 5%.
In terms of profitability, we target to reach by the end of the strategy period over 5% in EBIT terms, which equals over 8% in terms of EBITDA terms. In our balance sheet, the key metric is a net gearing below 100%. We're currently at a level of 91%, so we are already there and intend to stay there. In safety, the most important thing is a continuous decrease in the incidents, in the lost time incident frequency approaching zero. Indeed, a continuous improvement is the most important every day. The climate target, we will submit our SBTI commitment in the autumn, and we will then add a strategic target from that commitment to our strategic targets later this year. Our key development areas follow a sequence, and they build on the reinforcement of our financial foundation, which has progressed very well during the past year.
The development areas are the drive of the delivery performance in both the project and service delivery models, the growth of our solutions offering to provide outcome to our customers, and the commercial value capture from that offering. I just want to highlight that reinforcement of the financial foundation. If you look back at the past year or even half year, this all has practically, or most of it happened during the first half of this year. The first item here, strengthening our financial foundation, is the profit impact from the sale of the wind and solar power project development business to Fortum in February. There was some headwind negative impact from the ramp down of the EV charging, the zero emission transport solution business. That was also in February.
The profit impact from the sale of the marine and offshore unit, which happened after the review period in July, is also included. Altogether, these three strategic evaluations end up in a clearly positive impact, financially speaking. The value uplift program, like Jyrki described, has started well, and we are increasing the target we give to the program. The new financing arrangement, which we concluded in March, brings financial flexibility. The financial foundation is strengthened, and we have a clear and focused new strategy for our core business. The way we continue to accelerate strategy execution is threefold. We continue full speed with the value uplift program. We also started now in August last week the planning of a new operating model to implement the strategy. There are a number of new responsibilities we need to put in place. We are reshaping some roles.
We're also finding efficiencies, reducing some number of positions to reallocate to new positions and altogether find efficiencies in the equation. There is also, as a third area, other revitalization still inside the core business, not just in the non-core business, but in the core business, for example, the service centers in our energy transition business, which have generated negative results during the first half of this year. We have sold one of them, and we are working on the others to restructure and to improve performance there. This is what we are very much busy on at the moment, and I would now open the floor to questions and comments.
Good. Thank you. We have quite a lot of questions, and let's start with a couple of questions related to value uplift. First of all, strategy and value uplift combined causes EUR 2.5 million negative EBITDA impact. Why so much, and how do you see value uplift going forward?
Yes, they cost. We have put in place a team of professionals with also external support, and that carries a cost. When you look at the results of the program and the run rate that it generates, it makes a lot of sense.
First and deep execution.
Yes.
It's important what Jyrki says here. These kind of changes, we don't want to drag them for too long. When we do these kind of changes, we do them in a determined manner in a limited period of time, and then we reach a different level of performance, which we then keep.
Yes. A question to Jyrki about energy transition's non-core business EBITDA that was higher than the non-core business revenue. What was behind this development?
It's a question of when we are recognizing the profitability. They are big projects, and we have been very cautious because if you all remember the very difficult first half of 2024, and therefore we won't recognize the profits before we know that there won't be any claims and so on. We have been very careful with this, and the sales have been recognized earlier on when the project has been delivered.
Yes. Thank you. Another question for you, Jyrki, about the net financial costs. They were a bit higher than the comparison period. How do you see them going forward?
Yeah. Basically, we are quite at the same level than in year earlier. There were some currency losses during Q2, which are explaining the difference.
Yes. We could move on to the profit warning, which Enersense issued last week. What were the key factors behind the adjusted guidance?
Slightly lower revenue in Q2, but it is important to notice at the same time that the order book in our core business has turned to growth, and the relative margin of our core business is also improving. Going forward, this looks good. In terms of a year from last summer to now of refocusing the business, this could be expected that the refocusing might affect the top line, but now we are back on a growth trajectory.
Yes, Kari, you mentioned the order backlog, which has grown quarter on quarter. A question about that: how much of the order backlog is allocated for this year?
I don't have an exact figure, but typically, these are long projects. When you record orders in Q2, not a whole lot comes during half two. It depends also on the business unit. In Connectivity, typically, it comes through faster, and in the large project business, it takes a longer time.
Jyrki, about cash flow. Cash flow from operations was negative in Q2. When could we see a positive cash flow quarter?
My understanding is that the pattern will be quite the same as one year earlier. During Q2, we were already ahead of last year, and I believe that last year we were positive during Q3 and especially for Q4. I believe that we will repeat that more or less.
Good. We have quite many adjustments in the core business. How much adjustments do you expect to book in the second half of the year?
We would expect quarter three to continue quite similar to quarter two, and then the adjustments to start to decrease during quarter four. This is what I mentioned about this value uplift program and other strategic restructuring. We want to do them in a short period of time, and now is the most intense phase during Q2, Q3, slightly decreasing towards Q4 and the first half of next year. In terms of content, it's the value uplift program, which is heavily focused on procurement. There's also some assistance, which won't be there anymore in the second half to this thoroughly done strategy work. The restructuring work in energy transition around the service centers also counts into such strategy and restructuring cost.
Yes. Jyrki, so how much will the sale of marine and offshore unit decrease our leases?
If I remember outright, the remaining duration was one and a half years, and the annual level was roughly EUR 2 million a year, so around there.
Yes, continuing on the sale of the marine and offshore unit, how much will the finance expenses decline because of this sale?
I won't have a figure for that, but naturally, we will get rid of that lease, which is also partially in finance cost. We are releasing some cash, and its effect will be there.
Yes. A specific question of one of our covenants: which EBITDA is used in net debt/EBITDA covenant?
Group total EBITDA, headline EBITDA.
Yes. Kari, can you reveal any indications of how you will develop in terms of volume, for example, in business acquisitions in strategic target areas, and do you have a wish list?
We have worked on this, and we have worked on putting ourselves in a position where we can do also different types of strategic moves. We have now cleaned Enersense's portfolio to the core business. We have a clean path forward in the core business with the new strategy. We have strengthened our financial foundation, so it gives us options. In the strategy work and the strategic target which we have given ourselves, it's an organic growth target. We have, of course, worked also on what we would target as acquisitions during the period in terms of complementing, especially in spot acquisitions of talent or capabilities to accelerate the strategy execution path.
Yes. We already discussed, Jyrki, about the energy transition's core business adjusted EBITDA in Q2. What were the key reasons there? What was burdening the core EBITDA?
As I said, the level of project activity was lower. We feel that some postponements have happened in there among customers, and also we were having costs for this maintenance. We had loss making maintenance units, which we are now closing or selling during the second half of the year.
Yes. Thank you. We have a question which is probably more for the Board of Directors of Enersense, but if there would be a buyer for whole Enersense, would you be interested in selling?
I think it is better that the Board of Directors replies to that. We're trying to do our daily job to make ourselves attractive and highly performed.
Yes, I think that was all the questions. Thank you, and thank you for your active participation. Feel free to contact all of us if you have still any further questions.