Net sales decreased by 5 percent to SEK 207 (219) million, while adjusted EBITA was SEK 6 (6) million in Q1. The quarter showed further volatility, with substantial fluctuations both between subsidiaries and months. Half of the subsidiaries improved their profit levels. Concluded initiatives focusing on gross margin and cost-effectiveness counteracted the negative development in net sales.
First quarter 2025
- Net sales amounted to SEK 207 (219) million, -5 percent compared with the same period in 2024, of which organic growth was -5 percent
- Adjusted EBITA amounted to SEK 6 (6) million, corresponding to a margin of 3 (3) percent
- EBITA was SEK 6 (5) million, corresponding to a margin of 3 (2) percent
- Operating profit/loss (EBIT) amounted to SEK 0 (-1) million
- Basic and diluted earnings per share amounted to SEK -0.17 (-0.12)
- Cash flow from operating activities was SEK -22 (-1) million, affected by a tax deferral repayment of SEK -14 (-1) million.
CEO comments
Net sales during Q1 amounted to SEK 207 (219) million, a decrease of 5 percent (all organic). The year got off to a cautious start with a January characterized by low levels of activity among our subsidiaries' customers. EBITA for the quarter amounted to SEK 6 (5) million, and adjusted EBITA to SEK 6 (6) million. The weak demand was offset by an improvement in gross margin and good cost control in what is a modest quarter from a profit perspective. There is still considerable variation in performance among the subsidiaries, with half of the companies improving their operating profit. Cash flow amounted to SEK -22 million, affected by a build-up of inventory ahead of the peak season and the payment of a tax deferral.
Net sales among the Industrial companies was down 5 percent on the previous year, with DOFAB, Kenpo Sandwich and Färg-In being particularly hit by the weak construction market. However, these companies are stabilizing and seeing some increase in activity levels among customers. Bara Mineraler and Åkerstedts saw positive development in Q1 net sales, compared with a weak comparative quarter. The industrial companies' gross margin of 46% was unchanged compared with the previous year.
Net sales among the Product companies fell by 4%, driven entirely by Ludafarm, which is facing weak markets in both farming and industrial vehicle cameras. Other Product companies increased their net sales, particularly Opo Scandinavia, which continues to grow strongly (+14% this quarter). The Product companies' gross margin increased by 4 percentage points to 51%. This was largely due to implemented measures, as well as a change in business mix.
Operating expenses in the subsidiaries were somewhat lower than the previous year, and it is pleasing to note that concluded measures offset general cost increases. EBITA of SEK 6 (6) million in a seasonally modest quarter means that we saw our operating profit stabilize for the second quarter in a row, despite continuing weak markets.
Continued focus on improving gross margin
Gross margin improved by two percentage points in Q1. Eight of twelve subsidiaries reported an improvement in their gross margin during the quarter. Focused efforts on pricing and procurement have been initiated, and we are closely monitoring developments. The effects from measures are expected to become visible gradually throughout the year.
Seasonal increase in working capital
At the end of the quarter, the Group's "core working capital"* totaled SEK 232 million, compared with SEK 256 million in the same quarter of 2024 and SEK 221 million at year-end. Given the seasonal pattern with the peak season falling in Q2 for a number of major subsidiaries (including Nordbutiker and Bara Mineraler), development was satisfactory. Our ambition is to continue to reduce our working capital supported by a stronger focus and some new tools in our toolbox.
Cash flow for the quarter was SEK -22 million, of which payment of a tax deferral was SEK 14 million. The Group's net debt including tax deferrals amounted to SEK 308 (330) million. We are meeting the requirements set out in our bank agreements, keeping up with repayment plans, and have a good dialog with our lenders. However, debt in the Group is still too high. A focus on improving profitability and cash flow, combined with a proactive approach to working capital and other components of our balance sheet, is expected to reduce the Group's net debt and Net Debt/EBITDA ratio going forward.
Outlook for 2025
We operate in what remains an uncertain world. Seafire's subsidiaries, which have considerable exposure to Sweden, consumers and construction, have been hit by weak demand in recent years. Our baseline heading into 2025 was an improved market, but with uncertain timing and magnitude. Although we have seen an increase in activity among customers, caution still prevails and closing deals remains a slow process. There are also no signs of any recovery in order intake as yet. Seafire's subsidiaries have very limited exposure to the USA, but uncertainty around tariffs is likely to impact consumer confidence. We are focusing on what we can influence, but are dependent on market conditions. I would like to thank the Group's employees for their hard work and commitment and cautiously look forward to what this will mean for Seafire's financial development when demand increases again. I would also like to thank our shareholders for your support and patience with Seafire.
Daniel Repfennig
President and CEO
*Defined as inventories, accounts receivable, accounts payable and advances from customers.
For more information, please contact
Daniel Repfennig, CEO, +46 722-00 89 41, daniel.repfennig@seafireab.com
Jacob Persson, CFO, +46 708-64 07 52, jacob.persson@seafireab.com
About Seafire
Seafire is a company group consisting of the business segments Industrial components and Products, which acquires and develops companies in Sweden. The group was founded in 2016 and focuses on acquiring profitable companies with development potential. Seafire consists of 12 companies with sales of about one billion SEK. The company's shares are listed on Nasdaq Stockholm. For more information, please visit www.seafireab.com/en.
This information is information that Seafire is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-04-24 08:00 CEST.
