Okay, good morning.
One second, they'll, she'll do an intro.
Yeah.
They are doing the intro.
The Nederman Holding Q1 2025 Report Presentation. For the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to CEO Sven Kristensson and CFO Matthew Cusick.
Good morning, and welcome to this session where we are presenting the Nederman Interim Report for Q1 2025. If we start with some summaries, we can say we had very strong orders received. Three of four divisions had solid order intake, and two of them actually had record quarters in a very turbulent time. We continue to advance our positions in a number of areas. We have an extremely challenging macroenvironment. We have finalized and are still building on some further investment in operational efficiency. We do have a very high level in the newly inaugurated Innovation Center in Helsingborg, and we do have much better presence in structurally growing industries, which has been important in order to get a good order intake. We also, during last quarter, finalized the acquisition of Euro-Equip in Spain. A few words about Euro-Equip. Why did we do it?
It strengthened Nederman's Process Technology vision in foundry, metal recycling market, and, as we say, hot air applications. It's a strong market position. They are selling equipment to foundries, metal recycling, and especially aluminum smelting markets. Nederman and Euro-Equip have a very long working relationship where we have cooperated for decades. It gives us a sales structure and a support structure in the Iberian Peninsula and parts of Latin America. They have a headquarter in Lezama , a north part of Spain, Basque Country, and we paid about EUR 15 million for a company that has a turnover of EUR 22 million last year.
If I move on to some key financials for the Nederman Group for the quarter then. As Sven mentioned already, orders received was, rather strong, what, just over SEK 1.5 billion , a very small reduction versus a strong quarter one last year as well. It is the first quarter since Q1 last year where we've been over SEK 1.5 billion in order intake for the group. We're generally satisfied, and this is with, with obviously only three of the four divisions having a strong position. Currency neutral, we were down slightly, still 1.8% versus Q1 last year, organically minus 3%. If we move on to the sales, currency neutral, I had to check my calculations to correct, but it was exactly 0.0% change, versus last year. SEK 1.406 billion versus SEK 1.397 billion in the same quarter last year.
That's obviously lower, as we were flagging already during Q4 that we were entering the year with a lower order backlog than we had twelve months previously. What is positive for us, of course, is we've built up a backlog of approximately SEK 95 million in the quarter, so that bodes slightly better looking forwards. When it comes to profitability, ultimately, EBITDA was down by SEK 31 million to SEK 143 million versus SEK 174 million last year. There are some one-off effects that impact the result quite significantly that we ought to flag there. We mentioned already in Q1 last year there was a comparative figure boost.
Q1 last year was boosted by SEK 11 million, which was a pure accounting booking relating to a subsidiary liquidation that we did, if we completed in quarter one last year. The impact of Sweden, strengthening Swedish krona as well and the rapid depreciation of the US dollar, particularly at the end of the quarter, also made a big impact. Approximately SEK 20 million of impact that hits comparability. We also, a little bit further down the income statement, have obviously some acquisition expenses. We did a full thorough due diligence in relation to Euro-Equip , and that has been expensed now. There is nothing we apologize for, although it does ultimately impact earnings per share. Earnings per share in the end ended up on SEK 1.69 versus SEK 2.57 per share in the very strong quarter one last year. Moving on to the cash flow and net debt.
Euro-Equip , obviously, an acquisition for almost SEK 150 million has a, has an impact on cash flow. We bought, we acquired them just prior to the end of the quarter. We have the debt on the balance sheet, but very little income from them yet. That will obviously change going forwards. Cash flow from operations in the quarter was positive, SEK 15 million, which is down significantly versus last year. The main reason behind that is the reduced order intake in Process Technology , large orders in the Process Technology division, on receipt of them. We typically see large down payments from customers as well. A lack of those has impacted the cash flow from operations somewhat. Other working capital has remained rather constant in terms of inventory and receivables and such.
When we move on to net debt, it, I've given the figures, including a, you see the chart including and excluding our IFRS 16. The impact of these two, the leases on these two premises that we entered into last year is quite significant. You see the turquoise on the charts there. Net debt, nevertheless, excluding IFRS 16, has increased by approximately SEK 130 million- SEK 140 million versus 12 months previously. During that time, we have acquired Euro-Equip , Duroair , and Olicem as well in Denmark. Three acquisitions there obviously making an impact on the net debt. That's a brief summary of the financials for the group as a whole. If we move then on to the divisions, that's Sven, and start with Extraction and Filtration Technology first.
Yeah, Extraction and Filtration Technology . During the quarter, we saw the strongest ever orders received, which is a good thing. It was boosted by, in, in major orders, and it was particularly strong in America in contrary to what we will see in Process Technology . We also have been working, and we've been highlighting that for a long time, the aftermarket and service, and, we have here in the quarter double-digit growth also for the service segment, which is important. We did have much lower order backlog moving into this year, and that means that sales are lagging behind the comparative quarter. Eight out of 10 major orders were in US, as I mentioned before. They are doing well in welding, wood, defense, and green energy, EV batteries, et cetera.
We are now also further negotiating to exchange some Asian filter supply to EV batteries in the US, when they realize that they are not compliant and not working very well. We'll see how that comes out. EMEA saw stable order flow during the quarter, and there was a solid base business. APEC noted a slight slowdown, but we grew a little bit versus last year's Q1. If we talk about the attitudes, it's quite interesting. It seems like Germany are getting more, they're getting a backbone now, and starting to talk about future instead of being overly depressed. We'll see what that will lead to during the rest of the year. The key activities, relocation of production in Helsingborg was completing, and we had, February 11, full inauguration.
We have also seen that from when we look at the tariffs and so on, the division has a very significant manufacturing presence in the U.S. The vast majority of materials are sourced in the U.S., and we will, of course, continue to monitor the effect of the changing tariffs, but roughly 85% of the content is America origin for this division in the U.S., of course.
For, on the financials for Extraction and Filtration Technology , orders received obviously a strong increase, 10.7% versus last year, up to SEK 684 million versus SEK 615, SEK 616, sorry, last year. Sales SEK 50 million lower than the, the order intakes of SEK 635 million was almost in line with the same quarter last year.
With the acquisition of Duroair , they have a cost increase that means that results with the sales being flatter, a reduction in profitability. I can't blame the full EBITDA reduction on Duroair , it must be pointed out. Big positive here, 11% increase in order intake, quite clearly very strong for the division. Process Technology then, Sven.
Yes, Process Technology , we had low order intake in the quarter. There's a lack of major orders in the first quarter here comparative to slightly better Q1 2024. We have seen that there has been a hesitancy to sign the final papers for large orders, especially in the US. And we've seen a few orders that we expected in the pipeline to maybe be materialized to orders during this quarter that has been pushed forward.
We also had a lower order backlog when we moved into 2025. Of course, since this is long term and long cycles, we have lower sales as well in Q1. As mentioned, there is a very cautious customer base, especially in the US. It is not so much the tariffs in themselves, it is more the uncertainty that is spread. We do have a very strong quotation pipeline, and it is also so that we are entering into negotiations with lost orders or orders that we walked away from due to the fact that competitors have filed for Chapter 11, they have not been able to finalize the project, et cetera. There are a few that we are coming back to again.
We are cautiously optimistic that we will see some change during the late, latter part of the year as long as the fog is lifting from this turmoil around tariffs and so on. If we look at textile and fiber, there is a continued overcapacity in spinning, and we can see that has an impact. However, sales were in line with Q1 2024. We are taking market share. There are competitors that are leaving us. Foundry and smelters, Euro-Equip acquired, and it is a very good strengthening on market areas or especially geographical areas where we have not been as strong. Low orders, low orders received, but the profitability is still solid. When it comes to customized solutions, we had low orders received and sale. This segment is particularly reliant on major capital investments, so it is a clear risk of continued dampening demand in this segment.
Key activities, of course, integration of Euro-Equip, and as mentioned, the U.S. tariffs have not had any material impact on the division's product flow, but we will continue to look at it. Where it has the impact is the uncertainty that it creates.
Financials for the Process Technology division then, order intake SEK 344 million versus SEK 486 million, so that's, it's down currency neutral nearly 30%. That is, it must be pointed out, Q1 2024 was the strongest quarter, I think, in the last two years. It's tough comparatives, but nevertheless, SEK 344 million is low for this division in order intake. Sales, SEK 354 million, versus SEK 392 million. Again, we were flagging for this, but with the backlog going into the year was low. This is the lowest sales quarter for, since almost since pandemic, pre-pandemic times. Adjusted EBITDA still at 6.8%, SEK 24.1 million, but that's clearly down versus the, versus the SEK 31.5 million and 8% that we did in the, in the quarter one of last year.
A little look on, on the top, the chart on the top right of the Process Technology slide, you can see the black backlog is lower than it has been for quite some time, but, nevertheless, there is still a backlog there. If we move on to Duct and Filter Technology , Sven.
Yeah, Duct and Filter Technology for Q1, again, strong orders received, and it was, in many areas, but mainly driven by Northern U.S.. We had a continuous flow of major orders from manufacturers, even batteries. We have sharply improved sales. Do we have a solid backlog, continued positive trend in the quarter? If we go to, especially the North, where orders received and sales in the US grew sharply versus the comparative, Q1 2024, and we have strong profitability. We had new record order intake for ducting to the EV battery segment. Orders and sales grew in EMEA versus a modest comparative quarter, and there are still clear fluctuations orders and sales between quarters in APEC. Positive development in Australia, a new laser welder, installed in Thailand to improve efficiency and quality.
Menardi, orders received increased well versus Q1 2024, and our rapid delivery capabilities have resulted in several new orders during the quarter. We are a niche player, and we focus to support our own business, and, when we are close to the market, manufacturing is mainly in US, we can supply on short notice. Key activities is the expansion of the facility for larger dimension ducting, and, we have, as you possibly remember, already earlier last year inaugurated a completely new addition to the facility where we do the traditional QF Ducts. Now we are expanding also where we do the large- dimension ducting. We have also, during the quarter, inaugurated the completely automated warehouse in Thomasville, which is another efficiency booster, which you can see drives also up profitability.
At present, the impact of tariffs is very limited, and most of the manufacturing is local for the market where we are operating.
If I run through some very strong financials for duct and filter then, SEK 224 million in external order intake is up from SEK 184 million, up 19%. Sales at SEK 240 million versus SEK 207 million last year is 14% growth, and then the EBITDA increases from SEK 43 million to SEK 53 million and a margin, EBITDA margin for the first quarter of the year of 22.1%, which we are obviously very happy with. If we move on to Monitoring and Control Technology then.
Yep. Again, strong orders received, and again, divisions that had a new record order intake for a single quarter. January was very slow, but picked up in February and especially in March. NEO Monitors is starting to benefit from increased production capacity and efficiency. We are continuing to shape up that manufacturing site in Oslo, Norway. Profitability clearly up versus Q1 last year. EMEA, we have seen order intake growth. We do have a strategy to grow in service business, and that is developing well. We started when we started, and we acquired these companies. It was a very low portion that was repeat business and service. We have gradually increased that, and we also incorporate our digital solutions that enhance the capability of doing remote service, remote calibration, et cetera.
Collaboration between the business unit is increasing further, and we have an ongoing adaptation of Auburn FilterSense product line for Europe. We have also a full test setup in the new Innovation Center here in Helsingborg, where they have a long-term test capability we did not have a year ago to do in-house. We are looking forward to see the capabilities here, and the result. We will also start selling in larger scale AFS products in Europe end of the year. In APEC, several major orders received, especially in China, and we have here an increased focus on direct sales, especially NEO Monitors has performed very well, with orders and sales going up. The local service grown for new hub in China.
We have set up a small service hub in our factory in Suzhou, where we can do service, we can do calibration, and, instead of having to send and ship over to Oslo, we can now do the basic service in China, which has been received very well among our customers. In Americas, orders received increased sharply. All business units reported favorable growth. Auburn FilterSense delivered in line with its current capacity. We come then to continued key activities, which is to increase NEO Monitors' production capacity. It has also been taken a decision to increase the production capacity in Boston, US, and it will commence in near time. Production in US is in one site, and we have in Europe two sites. It's, as I mentioned, Boston, and it's Oslo and Helsinki.
There's no major change to product flow currently planned, and there are contingency plans in place for change in tariffs, including for some component sourcing if deemed favorable and necessary.
Financials for the division then, orders, external orders received SEK 249 million, which is very strong for, for them, up a record quarter, as Sven mentioned, up from, up 6.6% from a strong quarter one last year of SEK 234 million. Total sales clearly below, a long way below orders received, almost SEK 50 or SEK 50 million below. SEK 198 million in sales versus SEK 187 million is still an increase of 5.8%. On sales of less than SEK 200 million, the division has managed to do an 18% EBITDA, which is SEK 35.6 million. The outlook going forward then, Sven, the crystal ball.
Yeah, that's absolutely interesting to try to do, but demand continues to be slightly slower. Investments are a bit, investors are a bit hesitant, but our base business, our growing service business, and the very strong digital range enable us to assert ourselves well in current market. We do take market share. Even if the performance of divisions are largely positive, there's a risk that current very uncertain market environment can continue to impact customer investment decisions in the quarters ahead. We don't know. Some are doing very well, some are doing less well. I think that we have to see, and we will see that pattern. Our order backlog remains good, and we have a strong offering enabling us to advance our position even in this challenging macroenvironment .
In a world with growing insight into damage at poor, dust to people, NEO Monitors, its leading industrial air filtration offering, has a key role to play and good possibilities for continued growth.
The financial calendar for the upcoming period then, the annual general meeting is next week on Tuesday, the 29th of April at 4:00 P.M. here in Helsingborg. The preliminary record date for the dividend that is proposed to the AGM is the 2nd of May, and the distribution is scheduled for the 7th of May. The interim report for quarter two will be released on the 15th of July, and the interim report for quarter three will be released on the 23rd of October this year. With that, I think we can open up for any questions that listeners may have.
To ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Lena Bloom from Handelsbanken. Please go ahead.
Good morning, Sven and Matthew. Thank you for taking my question.
Thank you. Good morning, Lena.
As you mentioned in the report, good morning. As you mentioned in the report, it is expected that the growing geopolitical uncertainty will have a negative effect on order intake in the coming quarters. Is it possible to say anything about the current order trend if you already at the end of the quarter or now in the beginning of Q2 have noticed lower activity?
I know this is, I think that it's been a very interesting Q1. Started very slow, turmoil in February, very good bounce back in March when it comes to order intake. You can see that because it came fairly late. It continues, but it's very volatile. You see how good the specialties MCT is doing, duct and filter is doing, and order intake also in EFT has been on a record level. PT has suffered both in December and the first quarter that these mega large projects where we are a small portion of has been pushed forward, and we don't know when they will start again.
On the other hand, we are coming back to, and are invited again to orders where we clearly said to a customer or potential customer, we can't do it this cheap. We cannot do it on, on sort of this light model that has been because it just won't work. We have three actual cases where we are now reinvited because one doesn't work, two, the supplier has gone bankrupt during the meantime. We still stick to our price discipline, high quality supply, and we believe that will be a rather, rebound, later on. I think the coming two quarters can be very, very volatile with the 90 days of tariffs and so on. Investors want to see, or the boardrooms want to see that we have the fog is lifting. We know what we can expect in that.
It has been a very interesting period where we have growth in three divisions, record order intake of two of them, and one that has had a very, very weak order intake.
Okay, perfect. Thank you for that. In the extraction application division, you mentioned that profitability was dampened by fewer medium-sized orders, which usually have higher margins. Is this a trend that you expect to continue, like in the order trend, or is it usually something that can differ quarter to quarter?
If you look at the Extraction and Filtration Technology , they grew their backlog by approximately SEK 50 million in the quarter. They were lacking these mid-sized orders that were in the sweet spot, but we have had a very good order intake this quarter. We are expecting these orders that we've received will also boost the utilization in our factories as well. I think there will be, you'll see some bounce back on the profitability going forwards. That is, of course, dependent on the continued order intake, which is the big question mark. Those mid-sized orders are nice to have. We flagged already after Q4 that we were lacking a bit of backlog going into Q1.
This is, I think this is quite low margins in the quarter, and you should not expect that level going forwards. Anything to add on that, Sven?
Yeah, I think into the volatility, if you look on the last month of the quarter, the picture would have been significantly different if I put it that way.
Perfect. That's clear. And then just a last question for me. Also in extraction and filtration, you mentioned that orders were secured in data centers. Could you give some color on what your offering is to the data center industry? And would you say that this is a growing industry for you as a share of sales?
I wouldn't say it's a growing industry for us. We have some niche products that we are, but we, we have high quality product that can be in some areas be used. The key, I would say, the key developments is rather that we are now getting into battery manufacturing where the normal Asian supply has not functioned as it should. It's not fulfilling all the regulations. That is an area. We are also coming back into other areas where we have not been traditionally being present. As you know, we have been very strong and still are in welding, wood, composite, et cetera. We are now coming into more areas like food mixing stations, chemistry, and so on, as an alternative to a weaker demand in the traditional industry like wood.
You all know about the housing market, the furniture market, windows, doors, et cetera, has not had a good demand. We have also that into a number of others and broaden our scope because it's the same product. It's just a different application. As we are always cautious, when we go into new applications, we try, put the foot in the water and see, can we handle this? How do we do it? How do we know and handle the processes? Generally speaking, it's exactly the same product. It's just how you build the system around it.
Perfect. Thank you for that. That was all for me. Thank you for taking my questions.
Thank you.
Reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. No more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you very much. Thank you for taking the time listening. The takeaway from this is that it's turmoil, uncertainty, but we have a very strong order intake, and we are committed to continue to develop. We see that, despite the turbulence, we are continuing to strengthen our position as the market leader. We therefore have a positive view for the rest of the year. However, the turbulence might make it a bit bumpy on the way. Thank you for taking time listening.