Slides
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Q2 2025 Interim report Apr–Jun 2025 July 18, 2025
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Presenters CEO Krister Blomgren Tel +46 70 529 92 65 E-mail: krister.blomgren@engcon.com CFO Marcus Asplund Tel +46 72 601 37 17 E-mail: marcus.asplund@engcon.com Q2 2025 2
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• Highest Q2 net sales and order intake since 2022. • Net sales increase driven by the Nordic digging season - Coming back to traditional seasonal patterns. • Volume growth in Europe confirms that we are changing the world of digging. • Stronger Swedish krona and less favorable market and product mix are putting pressure on the margins. • Project initiated to develop engcon’s shared core values across the entire organization. • High volume from taylored customer offers to meet local standards. 3 Q2 business highlights Q2 2025
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Q2 2025 4 CHANGE THE WORLD OF DIGGING Early days (low penetration) Acceleration (accelerating penetration) Mature (high penetration) Increasing penetration and volume engcon basic engcon with local quick coupler engcon sandwich with EC-Oil
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5 Q2 figures in brief 23% 10% 18% 42% Organic order intake Organic net sales EBIT margin Return on capital employed 41% Gross margin Q2 2025
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Q2 2025 6 A strong second quarter • Order intake increased 4%, organic 10%, negative currency effect of 24 MSEK. • Net sales increased 18%, organic 23%, negative currency effect of 25 MSEK. • Return to historical seasonal pattern in the Nordics drove strong net sales in Q2. • Ripple effects from Liberation Day in the USA. Order intake and net sales development per quarter, MSEK Key comments 341 347 414 410 433 367 506 524 451 508 391 308 394 450 412 393 446 530 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Order intake Net sales
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7 598 593 642 717 741 611 601 620 652 700 0 200 400 600 800 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 R12 Order intake Net sales Nordics Q2 2025, Order intake and net sales, MSEK Key comments • Order intake increased organic 18%. • Net sales increased organic 30%. • Demand driven by increased replacement need, improved market outlook and lower dealer inventory levels. Strömsund Odense Vasa 167 126 192 231 191188 141 132 190 236 0 50 100 150 200 250 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Per quarter Order intake Net sales Oslo Q2 2025
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8 646 693 720 755 767 590 643 690 716 736 0 200 400 600 800 1 000 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 R12 Order intake Net sales Europe Q2 2025, Order intake and net sales, MSEK Key comments • Order intake increased organic 11%. • Net sales increased organic 15%. • Continued strong underlying momentum with increased market penetration and product awareness. • Bauma clearly showed that the tiltrotator has become a natural part of the industry. 173 176 204 202 185 177 185 172 182 197 150 160 170 180 190 200 210 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Per quarter Order intake Net sales Tewkesbury Veenendaal Wertheim Paris Q2 2025
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9 225 206 216 226 204 222 201 212 207 208 180 190 200 210 220 230 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 R12 Order intake Net sales Americas Q2 2025, Order intake and net sales, MSEK Key comments • Order intake decreased organic 26%. • Net sales increased organic 12%. • Higher deliveries linked to orders placed in previous quarters. • Uncertainties regarding tariffs are complicating pricing and slowing down demand. 62 41 67 56 40 58 60 53 37 59 0 20 40 60 80 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Per quarter Order intake Net sales Montréal North Carolina Q2 2025
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10 Asia-Oceania Q2 2025, Order intake and net sales, MSEK Key comments • Order intake increased organic 24%. • Net sales increased organic 53%. • Positive development in Japan. Strong governmental incentive for efficiency-boosting technology. • Strong growth in Korea despite bleak macroeconomic outlook. Sydney Chungcheongnam-do 31 24 43 35 34 27 27 35 37 38 0 10 20 30 40 50 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Per quarter Order intake Net sales 135 132 138 132 136 119 119 126 126 137 105 110 115 120 125 130 135 140 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 R12 Order intake Net sales Q2 2025 Tokyo
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Financial development 11 Se över grävmaskinsmärken! Q2 2025
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12 EBIT Development • EBIT increased 15% to 94 (82) MSEK, mainly from higher net sales. • EBIT margin decreased to 17.8% from 18.2%. EBIT and EBIT margin per quarter Key comments 104 55 19 60 82 91 63 84 94 20.5 14.1 6.2 15.2 18.2 22.0 16.0 18.8 17.8 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 EBIT, MSEK EBIT margin, % 15% Q2 2025
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13 Overview of costs and EBIT MSEK 2025 Q2 2024 Q2 2025 R12 2024 FY Net sales 530 450 1,780 1,649 COGS -314 -248 -1,002 -923 Gross margin 40.7% 44.9% 43.7% 44.0% Selling expenses -72 -73 -263 -262 % of net sales -13.6% -16.2% -14.8% -15.9% Administrative expenses -33 -33 -126 -121 % of net sales -6.3% -7.3% -7.1% -7.3% R&D expenses -13 -16 -47 -47 % of net sales -2.5% -3.5% -2.6% -2.9% Other operating income and expenses -2 2 -13 0 % of net sales -0.4% 0.4% -0.7% 0.0% EBIT 94 82 330 295 EBIT margin 17.8% 18.2% 18.6% 17.9% Key comments • Gross margin of 40.7% (44.9) and 43.7% R12. • Negative currency effects and less favorable market and product mix are holding back the margins. • Maintained operating expenses through scalable business model. • EBIT margin of 17.8% (18.2) and 18.6% R12. Q2 2025
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14 Cash flow Cash flow and net working capital overview, MSEK 277 108 96 -44 32 144 107 13 87 2023 Q2 2023 Q3 2023 Q4 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2025 Q1 2025 Q2 MSEK 2025 Q2 2024 Q2 2024 FY Cash flow before changes in working capital 87 63 277 Inventories 446 347 339 Accounts receivables 323 282 227 Other receivables 30 51 20 Accounts payables 152 116 83 Other payables 126 122 37 Net working capital 521 442 466 % of net sales, 12 months 29% 29% 28% Cash flow from operating activities 20 32 239 Investing activities -11 -10 -44 Operating cash flow per quarter, MSEK Key comments • Stronger operating profit and reduced tax payments offset by higher net working capital. • Unutilized total liquidity of 261 (300) MSEK and 446 MSEK FY 2024. Q2 2025
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15 ROCE level Return on capital employed overview Average capital employed and ROCE MSEK 2021 2022 2023 2024 R12 EBT 341 415 365 295 312 Interest expense 2 8 16 18 32 Capital employed, beginning of period 699 735 765 781 816 Capital employed, end of period 735 765 781 853 836 Capital employed, average 717 750 773 817 826 Total assets 1,013 1,186 1,012 1,112 1,257 Non-interest-bearing liabilities 278 421 231 258 421 ROCE 47.8% 56.4% 49.3% 38.3% 41.7% 717 750 773 817 826 47.8 56.4 49.3 38.3 41.7 -20 0 20 40 60 80 100 660 680 700 720 740 760 780 800 820 840 2021 2022 2023 2024 Q2 2025 Average capital employed, MSEK ROCE, % Q2 2025
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X% Q2 2025 16 23% Net sales organic growth Financial targets EBIT margin 42% Return on capital employed 49% Equity-to-asset ratio Growth Profitability Capital efficiency Capital structure Exceed the growth in existing market through organic growth. Have an EBIT margin in excess of 20 per cent, measured over a business cycle. Continue to achieve an industry-leading capital efficiency. ROCE to exceed 40 per cent, measured over a business cycle. Maintain a strong capital structure supporting further expansive organic growth and dividends to share- holders. Equity-to-asset ratio to be above 35 per cent. 18% EBIT margin
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• Closing the second quarter with strong net sales and solid order intake. • Strong recovery in the Nordics. • Accelerating volume in Europe. • Lost quarter in the Americas. • Solid commercial traction in Asia-Oceania. • Stronger Swedish krona combined with less favorable market and product mix impacts the margins for the quarter. • Focus on corporate culture and personnel lays the foundation for continued growth. 17 Summary & Update Ska bytas mot Bauma-bild! Q2 2025
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"Looking forward, we anticipate continued growth compared with the preceding year as a result of the recovery in the Nordic region and increased market penetration in Europe and AsiaOceania. In the second quarter, we were negatively impacted by the stronger Swedish krona and we cannot rule out that this effect will be sustained moving forward” Q2 2025 18 Looking ahead
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Q&A For more information visit www.engcongroup.com