Hello, and welcome to today's webcast with Prevas. With us presenting today, we have the CEO, Magnus Welén, and CFO, Helena Burström. If you're calling in and would like to ask a question, please press star nine to raise your hand, and then star six to mute yourself when you get the word. You can also type in your questions using the form to the right. With that said, please go ahead with your presentation.
Thank you very much. My name is Magnus Welén, and I'm the CEO of Prevas. As you said, together with me today, I have.
Helena Burström, CFO. Hello.
The agenda for this short meeting will be we start with an introduction. We will have a review of our financial performance of the quarter. We will have a view on the market, a short market update, and then we will finalize the meeting with a Q&A session. I hope that you all have very good questions for the Q&A session after the presentation. Okay, looking into the first quarter of 2025 for Prevas. The turnover was SEK 430.7 million. The growth was driven by acquisitions. We actually had a reduced organic growth for this quarter, and that was due to a lower utilization than last year, and also a consequence of the mitigation actions that we have taken. We actually have reduced capacity in some regions in order to cope with the lower demand.
That was, of course, then also reducing the turnover for the quarter compared to one year ago. All in all, 6% growth for the quarter. Looking into the profit levels for Prevas during the first quarter, it was actually above Q3 and Q4 2024, although lower than Q1 2024. The EBITDA came in on SEK 35.6 million with an EBITDA margin of 8.3%. To be honest, this is not an EBITDA that we are satisfied with. We have a financial target to reach 12% of EBITDA, and we are now on 8.3%. What we have been doing for this quarter is a very strong sales focus and continuous mitigation actions. Even in this quarter, we have actually been reducing, unfortunately, our capacity in some of our regions, but also recruiting in some other regions.
We have had a strong cost focus during this quarter as well in order to cope with the situation we have. One of the main areas where we need to be much better than we are is in Finland. The positive thing for the Q1 in terms of Finland is that we have an improved margin for this quarter compared to the fourth quarter of last year. Still on a very, very low level, too low level, but I see that as an important step forward for us that actions we're taking are actually also showing out in the EBITDA as well.
If we adjust for Finland and the negative calendar effect for this quarter of SEK 5 million, the EBITDA margin for this quarter should have been 10.4%, which I believe also shows that Prevas, core in that sense, is continuing to deliver a healthy margin, although we can and will do better. During this quarter, we also announced the acquisition of OIM Sweden. I will come back to that more in detail, but that was signed actually on the 24th of April this year, so it was actually after the closure of the first quarter. Looking into the details of the quarter, as I said, we have an EBITDA margin of 8.3%. The EBIT margin was 7.4%. That is lower, and the reason that is lower is actually acquisitions cost related to the acquisition of OIM. Still, the deviation is not as big as it was last year.
The relative reduction of EBITDA, EBIT is actually lower than EBITDA for this quarter. What we also see, which is positive for the quarter, is that we continue to deliver a good cash flow. The operative cash flow for the period was SEK 32.2 million compared to SEK 27.5 million last year, which of course is very good, and Prevas continues to have a good cash generation capacity even in a more tough market situation than we have today. With this, I would like to hand over to you, Helena, and tell us a little bit about the financial position we have in Prevas right now.
Thank you, Magnus. Just to repeat what Magnus just said, Prevas had a strong cash flow with an increase from operating activities with 19% or SEK 5 million compared to Q1 last year, from SEK 27 million Q1 2024 to SEK 32 million Q1 2025. This is driven, among others, by an increase of working capital positively affected by decreased accounts receivables and other short-term receivables. Cash flow from financing activities increased with SEK 11 million, affecting cash flow negatively compared to the corresponding period last year. That is connected to the amortization of loan connected to the acquisition of Prevas Finland. The overdraft facility of SEK 100 million was unused at quarter end, and cash at quarter end amounted to SEK 49 million. Prevas is well below the financial target of maximum 2x EBITDA. Net debt in relation to EBITDA is 0.84x .
Prevas' equity ratio amounts to 50.3% in Q1 2025. To summarize, we have a strong balance sheet and a solid financial position. Magnus, I hand over to you again.
Thank you very much, Helena. Now we move into a brief update of the situation we have in our Finnish operations. Generally speaking, we are focusing on building the Nordic platform because after the big acquisition of Enmac last year, Prevas now is a Nordic company. Our Nordic team works together now to explore new businesses and new opportunities. I am very pleased to see that integration runs according to plan. As I said, the focus is to build a new, strong Nordic Prevas long term. That is long term. We also have the short term. Short term, we have a lot to do in order to get up to a decent margin in Finland, as I was mentioning before in the presentation. What we have been doing during the first quarter is a very strong sales focus and also continue to take mitigation actions.
During last year and also during this year, we have had temporary layoffs in order to adapt to the very low market. We also have made some layoffs as well in order to fine-tune our organization towards the actual market need. That is one thing. The most important thing is the sales and the future in that sense. During this quarter, I'm very pleased to see that the order intake for Finland actually was SEK 90 million for the first quarter. This is a very strong order intake. For the second quarter, the start was actually really good as well because we have seen also in the start of Q2 that we have got some nice order as well. The downside, if I put it like that, it's fantastic to have this order intake. It's very good for the medium term and for the long term.
When we look into the orders that we have signed, a big part of those orders are actually for Q3 and Q4 2025, the start of 2026. For the medium term, it will be very positive. We still need to fight short term in order to get orders, in order to get the right utilization to increase the profitability in the short term as well. Generally speaking, the situation in Finland is going in the right direction, driven by the strong order intake that we see during the first quarter. What we also see in Finland, which is very positive, is that we actually have regions where we actively are recruiting. In the northern region, for example, they are expert in piping, in piping design and piping engineering.
There we have a very good order stock, and now we are recruiting in order to meet the demands. In the southeast region in Finland, it's the same, where we have a good order stock now. We're starting to recruit in order to meet the demands that we see for the quarters to come. As I said, we are not satisfied with the very low EBITDA we have in Finland right now. Even though this first quarter was better than the fourth quarter of last year, it's a gradual recovery of margins, and it takes time to turn the ship around in that sense. We are moving in the right direction in Finland, which I'm very pleased to see. A little bit about the general market update for Prevas. More or less, we see the similar market demand as we did in Q4 2024.
A flat development. It's very tough, quite low demands in some regions. In some areas, we actually see quite good demands. It's a very dynamic market situation, as it has been for quite many quarters now. We have a tendency to see that customers, they wait for decisions in some of our customer areas, in some of our industries. Not in the defense industry, of course, but there we see quite big demand. What we also still see is high competition in general IT services in software areas, where it's an important part of Prevas, but it's not a big part of Prevas in that sense. There we still see high competition, as it has been for quite many quarters now. What is very positive for Prevas is that the demand from the defense industry continued to grow.
It was the same in the first quarter as it was in the previous quarter. We see strong demand from the defense industry, and we are well positioned in that area as well. Also, from the energy sector, we see increased demands as well. There are areas in the market where we see growth. Another fact is that the geopolitical situation has been rather, I would say, challenging for the first quarter with the tariff discussions, et cetera. What we see from a Prevas point of view is a very limited effect so far due to this increased uncertainty. We are very close to the customers, and we are ready to act if we see that we need to act due to the increased uncertainty that we see in the geopolitical situation. So far, very limited effect in Prevas.
Our customer base is working, the industrial customers working on a global scale. They are, of course, affected by one way or the other, I would say, to the geopolitical situation. We are there, and we are very agile in the way we see this as well. Generally speaking, the demand for complex solutions remains strong. That is very important for Prevas because that is where Prevas comes to its best, where there are complex solutions and we can support the customer in the best way. There we see that that demand is continuing as well, even this quarter as well. Looking into the first quarter, also second and third quarter of 2025, we have a strong focus to grow in the defense area, but also in the energy area.
We have taken action, specific actions to enable future growth and strong growth in defense that we have seen. We have increased the sales resources towards the defense area. We are investing in further measures in order to be able to deliver on a broader scale. That means working with our IT and our safety systems and our processes. We are strong already in delivering projects and scope of works for the defense industry. Now, as we are growing, we need to grow also in terms of processes, IT security, and other measures around delivering to the defense industry as well. As you can see in the industry breakdown, the defense part of Prevas invoicing this quarter compared to last year. This year we had 14%. Last year we had 10%. It is a strong increase in defense.
Looking into the energy area, it has begun from 10% up to 12%. We are actually growing in the areas where we see growth, which is promising. All right, then a little bit about the acquisition we have made of OIM Sweden AB. OIM Sweden is a product development house in Malmö, Sweden, with around 40 employees. They were founded in 2011, so they've been around in the market for quite a long time. It's a stable company in that sense. They are developing very advanced Medtech solutions, Medtech products for demanding customers. I would like to give you one example of what they actually do so that you understand. For a company called ProstaLund, OIM has delivered a system for treatment of benign prostate enlargement with heat treatment instead of surgery. This is very good for the patient because you don't need surgery.
It is also good for the hospital, of course, from the cost point of view because it comes at a lower cost. OIM has been able to develop this together with ProstaLund over quite many years now, from industrial design, all the engineering disciplines, the prototyping, and the small series productions. I think it is an excellent example of how good OIM fits into Prevas as such. This company, I feel very, very excited about coming into Prevas. Why should we acquire this company? Not only that they are good in product development, it is also a very good fit in terms of strengthening our position in the Malmö Lund region. Together, we shape, I would say, the region's strongest product development hub with around 120 employees in the Malmö Lund region, with expertise in product development, in UX, and also advanced test and measurement development.
From a strategic point of view, it is also important for us to add this fantastic team into Prevas. This acquisition is subject to regulatory approvals. We estimate that the consolidation can be done from July 1st this year. A warm welcome to the team from OIM into Prevas. As a summary of this quarter, Prevas continued to grow through acquisitions for the first quarter. We take several actions in order to mitigate, to improve the margins because we are not satisfied with 8.3% of EBITDA margin in Prevas. We have a financial target of 12%, and we are working hard in order to improve the margins in Prevas, not only through taking reactive actions, but a lot about sales focus, about developing our offerings to our customers to be more relevant.
One area, or I would say two areas, of course, where we focus is the defense area, and the energy area. Sorry. During the quarter, also very positive to see that the order intake is picking up in Finland. Also that the EBITDA is improving as well. Even though on a very low level, it's a positive journey that we're on. And I'm so convinced that we will see Finland coming back on track in terms of profitability, and there will be a strategic part for the long-term journey of Prevas into the future. I'm very happy to announce the acquisition of OIM Sweden that I presented on the slides before. That is very positive as well. As a summary, we have a very strong balance sheet and strong financial position in Prevas.
We have a strong cash generation, and we are ready to continue the Prevas journey into the future. Actually, even though the market is quite tough, we need to take mitigation actions. We look positive to the future as well in Prevas, but we need to work hard even the coming quarters as well. With that, I would like to finalize this part of the presentation, and then we move into the Q&A session. Thank you very much for listening.
Thank you very much, Magnus and Helena, for that presentation. Let's open up the Q&A section here. If you're calling in and would like to ask a question, you can press star nine to raise your hand and star six to mute yourself when you get the word. We have Stefan Knutsson from ABG. Please go ahead. You have the word.
Hello, do you hear me?
Yes, we do.
Perfect. Good morning, Magnus and Helena. Some questions from me. Firstly, it seems that the market environment is very different depending on which end market you're looking at. You already mentioned strong demand in energy and defense, but can you share some more insights into automotive, life science, and products that struggle here in Q1?
I can start with automotive part. Prevas is not very present in the automotive business. We all read about the cost reduction that Volvo are planning in Gothenburg for the group Volvo Group, Volvo Cars, actually. We have a very low presence and low activity in the automotive business. In that sense, it will not affect us directly. Although, of course, from an indirect point of view, if Volvo is reducing heavily, it might have an indirect effect for us.
The direct effect will be not visible, I would say, in that sense if Volvo is reducing in Gothenburg. Looking into the life science area, it's also once again quite different between different customers in that segment. As you say, it's not booming. There were signs last year that we saw some trends upwards. This quarter has been more or less flat, actually. Then you had the third. Which one was the third area, Stefan?
I was referring to your segment, the products and devices.
Yeah, okay. Product and devices is more or less quite a lot of different companies. Very difficult to, I have no good answer to the development in that sense. Generally speaking, the customer base we see, the customer demand is quite flat in general industry.
We have not seen any big, I would say, reductions, but definitely no big upturns as well. Where we see growth is in the defense industry and also in energy. General industry is more or less flat, I would say.
Okay, perfect. And then one more question regarding the utilization rate. I know that you do not disclose the actual number, but maybe you can share some more words on where we are in terms of historical comparison to get a broader understanding of the current profitability levels if we compare, for example, to where you were in 2013, maybe.
Yeah, yeah. As you say, we are not publishing, announcing the actual figures, but it is very obvious that we have a lower utilization now than we had one year ago. That affects the EBITDA quite substantially, of course, for the quarter as such.
If you turn that the other way around, of course, we have an upside in terms of EBITDA given a more normalized utilization. What we also do is we work with adapting the capacities to secure that we are increasing the utilization as well to more healthy levels in that sense.
You would say that you are below where you are in the normal market in utilization right now? We are, yes. Okay. Perfect. You shed some light on the tariff discussions that it had not had any big impact. Is it not that your customers are a bit more hesitant to make larger investment decisions in this environment?
Of course. I would say that that effect for the quarter has been extremely low, as I wrote in the report. Of course, we have discussions.
Regarding larger projects, we see that they push decisions forward. That is obvious. As I said, the direct effect for Prevas so far has not been big. We see an effect when we talk about larger projects that they are pushed forward. That's true.
Okay, perfect. That was all for me. Have a good day.
Thank you.
Okay, we'll take another question that got in here. The large order intake of SEK 90 million in Enmac, is that connected to the large order that Valmet got last year?
Unfortunately, I would say that it's not directly connected because what we have seen in terms of the demand from Valmet is that those orders, we have had orders, but that is not explaining the good order intake in this quarter.
It's other customers that we have had orders, which of course is positive in that sense because that means that the demand from Valmet will come, although it will come later.
Okay, thank you. Your experience in growth in the defense and energy sectors, how do you view the outlook in other sectors?
Very, very difficult to answer that, I would say, given the political situation and economic situation. Generally, what we see is a flat development. The industrial companies, they are adapting rapidly to the changes, although they are still performing rather well in terms of profit, not maybe in growth, but in terms of profit. We see that our major customers, they are making a good profit. We have high hopes that they will continue to at least be on the flat level moving forward for the forthcoming quarters as well.
In a competitive talent market, how do you attract and retain the right people to continue growing, but also innovating?
It's a lot of answers to that question, but everything more or less is about being a very, very attractive employer. As the people that we want to recruit are engineers, a lot boils down to our ability to create the most interesting assignments for engineers. If we manage to have the most attractive customers and the most attractive projects, that will attract the best engineers. That is a path that we are choosing to be attractive for our potential employees in that sense. Of course, on top of working a lot with values, with the company culture, et cetera, all of those things are as important.
As we are an engineering company, I would say the key thing is to offer the most interesting projects and assignments and also combine that with very good management and a good journey together.
Okay, and we'll take one final question here before wrapping up the Q&A section. Congratulations on the recent acquisitions of OIM Sweden. Are there more additional acquisitions or expansion plans on the horizon?
As I mentioned in the presentation, we have a strong balance sheet and we are looking always, I would say, for interesting acquisitions even moving into the future. I would say the answer is yes, although we are very, very picky with our companies that we acquire. We need to have a very good fit into Prevas. I think OIM is a very good example in that sense.
It's a company that together with OIM, we shape a strong position in the Malmö region, Malmö Lund region, and building a very nice development hub. I think that is how we want to work with the acquisitions in the future as well. Very picky, but identify potential new partners coming into the Prevas family. So that was a long answer that we can summarize with a yes.
Thank you very much, Magnus and Helena, for presenting today, but also answering all of our questions. And thank everyone for tuning into this presentation with Prevas. Okay, thank you very much.
Thank you.
Thank you. Bye-bye.