Ladies and gentlemen, welcome to the Garo Interim Report First Quarter 2025 presentation. I am George, the conference call operator. I would like to remind you that all participants will be listened on remote, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. At this time, it's my pleasure to hand over to Jonas Klarén, CEO. Please go ahead.
Good afternoon, everyone, and welcome to Garo's Q1 presentation. My name is Jonas Klarén, and I am the CEO of Garo since January this year. It has been an intense start, and I continue to be inspired by the strength, commitment, and spirit of our teams. I spent time in most of our countries, met the majority of our plus 400 employees, and seen firsthand both the challenges and the opportunities ahead. With me today is Helena Claesson, our CFO, who will guide you through our financial results later in the presentation. Let's get started. Next slide, please. I will begin and summarize our first quarter. First out, Garo Electrification. We see a continued growth in Ireland and Finland. At the same time, we are seeing stable demands in the public, commercial, and renovation sectors. However, the Nordic residential construction market remains weak.
We continue to focus on stabilizing our sales and margins, and we are seeing early signs of recovery in certain housing-related segments. In Garo e-mobility, the market remains challenging with the weak momentum and the delayed investments. Our action program is starting to show results, and with costs coming down and improved cash flow, sales today are driven by our proven products, Entity Pro and the LS4 series in public charging, while new products as home wallboxes, Compact, and Home are yet to gain market traction. As I said in Q4, we are pleased to have Entity Pro now iShare certified for Germany, which has finally enabled us to start sales of the Entity platform. However, volumes are still modest, and this is our general feeling of the German market in all. Our focus remains on securing market stability and improving the customer experience.
Our strategic focus now on the leadership side. We now have our new C functions on board in the management team. This is key to enabling better integration between electrification and e-mobility, and it also ensures that we are positioned for future growth in electrification. Our customer-driven development continues to be at the center of our innovation agenda, and finally, our long-term growth drivers remain intact, but we continue to be cautious in the short term. In summary, we have a strong team in place, and we are making progress, but we continue to have respect for the challenges that remain in the market, both in the short and long terms. Now, over to you, Helena. Next slide, please.
Thank you, Jonas. I would like to start by looking at the financial summary for the first quarter. Net sales amounted to SEK 265 million, a decrease of 9% compared to the same quarter last year. Garo Electrification continued to show stability, while the charging infrastructure market has remained challenging. However, following a relatively weak start to the year, activity levels were somewhat stronger in the latter part of the quarter. Overall, the gross margins have been at similar levels to the previous quarter, where stronger margins within Garo Electrification have been offset by lower gross margins within Garo E-mobility, a result of changed product mix. The adjusted EBIT for the quarter came in at SEK 0.4 million, where the quarter has been burdened with SEK 2.9 million in settlement costs for the former President and CEO. Adjusted EBIT in the same quarter last year amounted to negative almost SEK 7 million.
As Jonas said, we can see the results from the action program implemented in the second half of last year. Decreased costs, and we have our business area, Garo E-mobility, now working towards a positive cash flow. Next slide, please. Then we look into the two business areas separately, and we start with Garo Electrification. Net sales amounted to SEK 204 million for the quarter, which is SEK 4 million less compared to the same period last year. The overall market for Electrification business area was mixed during the quarter. While Sweden experienced a decline during the global uncertainty and market stagnation and dropped 14%, other markets managed to exceed our expectations. Both the Nordic region and the rest of Europe, excluding Sweden, showed a growth of 12% and 16% respectively. Sales in Ireland were particularly strong also in this quarter.
Our project business decreased by 11% compared to the same quarter last year. The decrease in projects is mainly noticeable in Sweden, while the other countries have a good development in the product area. The operations in Ireland, the U.K., and in Norway continue to show a positive trend. Increased sales and improved profitability are noted in these countries through a broadened product program. Adjusted operating profits amount to SEK 70 million, where the quarter has been burdened, as I said, with SEK 2.9 million in settlement costs for the former president and CEO. Adjusted operating margin came in at 8.5%, which is slightly better compared to the same quarter last year of 8.1%. Next slide, please. Now we focus on the Garo e-mobility business area.
Net sales amounted to SEK 61 million for the quarter, giving us a negative growth of 28% or SEK 24 million compared with the same quarter last year. E-mobility continues to be a challenging but important market for Garo's future. During the quarter, however, Garo has won several good projects in Europe. For example, a project with a forestry commission in Scotland. Garo will deliver a larger number of LS4s over a period of six months to be installed in the Scottish Highlands for public charging. The choice of Garo's LS4 for public charging is based on the weather conditions being very similar to the Nordic conditions. Furthermore, Garo has also won a larger project with LS4s for the emergency services in Wales. The market in Germany remains cautious, and sales in the quarter were similar levels as last year.
The adjusted operating profit for the quarter amounted to SEK 70 million and is fully explained by the lower volumes. As said before, we can see the results from the earlier action program, decreased costs, and the business area is working towards a positive cash flow. Next slide, please. Now looking into cash flow and balance sheet. Cash flow from the operating activities before changes in working capital amounted to SEK 10 million. Cash flow from operating activities after change in working capital amounted to SEK 0.5 million. Tied-up capital from inventories decreased net with SEK 20 million. We have a deposit with the supplier for materials ordered but not yet called off. The deposit being in EUR has remained unchanged during the quarter and amounted to the equivalence of SEK 42 million at the end of this period.
Our net debt positions amounted to SEK 286 million compared with SEK 278 million in the year earlier quarter. We had an equity-asset ratio of 51.2% and available liquidity, including overdraft facilities, of SEK 75 million. As from November last year, Garo has entered into a new agreement with the bank regarding special conditions, so-called covenants, linked to Garo's cash flow over time. As of March 31st, Garo met the special conditions. Now back to you, Jonas. Next slide, please.
Thank you, Helena. The next step in our journey has been to strengthen our leadership team to navigate change with an even stronger crew. On this slide, I would like to introduce our three new key roles in group management. Chief Operating Officer Joe Ree. Joe's focus is to strengthen our industrial structure, cost control, and on-time delivery performance. He supports the business areas by ensuring that production, procurement, and logistics are coordinated and efficient, enabling our sales teams to deliver to customers on time, in full, and at the right cost. His role is to optimize the operational backbone, freeing up our business area directors to fully focus on market growth and customers. The expected impact is stronger and more reliable execution in our core business. Chief Technology Officer Paul Fox. Paul's focus is to lead our innovation pipeline and product platform strategy.
He supports the business areas by ensuring that R&D is aligned with commercial needs, helping them bring the right products to market faster, and securing our R&D leadership. His role is to make sure our innovation is business-driven with clear priorities and time-to-market discipline. The impact is to deliver future-ready and customer-relevant solutions that strengthen our market position. Chief Human Resources Officer Karin Wiegert. Karin's focus is to continue to build our culture, develop leadership, and secure talent across the group. She supports the business areas and all functions by helping us create a unified high-performance organization, ensuring that we have the right people, capabilities, and leadership to deliver on our strategy. Her role is to enable cross-functional collaboration, leadership development, and retention of key talents at all levels. The results will be a strengthened identity and culture.
Together, this team now forms the backbone of our transition, supporting our business area and supply chain directors and country managers, where each role has a clear mandate to enable better results, faster decision, and a more integrated group, while keeping commercial ownerships fully with the business areas and our country managers. Next slide, please. This slide illustrates how we're now moving step by step on our execution journey from setting the foundation to embedding the transformation into our ways of working. At the base of the arrow, you see phase one, where we have laid the foundations. This is where we have been and appointed the new C functions, defined clear roles and responsibilities, and introduced this as a concept we now call Team Garo as the platform for change. This was a crucial first step, giving us the clarity and alignment needed to move forward.
Moving up, we are now in phase two, strengthen and align. Here, we are driving country strategy reviews, launching initiatives across sales, supply chain, and HR, and beginning to align our R&D and operational governance on group level. On top of the arrow is phase three, integrate and accelerate. By September, we aim to fully roll out the new governance model, ensure group-wide alignment between product development and operations, and to finalize our 2026 strategic plan. This is a clear and focused journey, and each step is building towards a Garo that is more integrated, more scalable, and ready to lead. Next slide, please. Back in Q4, we said that we would not wait for the wind. We would adjust our sales, and that is exactly what we have done in the first quarter. Despite the market that remains cautious, we have made real operation progress.
Our cost control program is starting to show results, and we have improved cash flow, and our EBIT is back slightly in positive territory. We have also strengthened our leadership with the new three C roles, giving us more speed and focus as we enter the next phase. Within electrification, we are seeing stable performance and early signs of recovery in housing-related products. In e-mobility, the market is still tough, but we are seeing the effects of our actions, and we are building a more resilient foundation. Yes, the market recovery is slow, but it is coming. When it comes, we will be ready. The long-term demand for electrification, energy efficiency, and smart infrastructure is undeniable, and Garo is building for that future now. We are staying the course with the ability to adapt quickly, act with discipline, and always move with a purpose.
That is the power of our team Garo, and that's how we're going to lead this transition together. That's all. Next slide, please, and questions.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. Once again, to register for a question, you may press star and one. Our first question comes from Lund Anton with Kepler Cheuvreux. Please go ahead.
Hello, Jonas. Helena, can you hear me?
Yes.
Yes, we can. Hello.
Hello.
Very good. Hey. Since we're halfway through Q2 now, what can you say about the quarter so far? It seems like momentum was better at the end of Q1.
Yes. We have continued to see so far the same trend, given the fact that April this year was a month where we had Easter. Easter is within electrification; that is less working days, and that has a little bit of an impact on the sales within electrification. Last year, Easter was in March.
Right. Okay. You mentioned these several good projects in Scotland and Wales, I believe. Can you tell us anything about the size or significance of those?
The size and significance is roughly, if you look into numbers, a few hundred LS4s, you can say. I cannot go into a specific number since this would be a little bit more clear to us, but it is a significant number. The LS4 has always been a very favorable product in the U.K. and in Ireland. We are really happy that sales have taken off again.
All right. Very good. I guess one last quarter from our side. It seems like you have realized almost all of the cost outs. Do you have any additional potential there to be realized in Q2, or is it fully realized here?
I would say that it's fully realized. We have the effects. Yeah.
Yeah.
All right. Very good. That's all for me. Thanks.
Thanks.
Ladies and gentlemen, this was our last question. I hand back over to the management for any closing remarks.
Just want to say thank you for listening. We will see you in Q2 again. Thank you.
Fine.