Highlights of the period January - March 2024
- Net sales amounted to SEK 1,240 (1,278) million
- Adjusted EBITA amounted to SEK 100 (119) million, corresponding to an adjusted EBITA margin of 8.1% (9.3%)
- EBITA per share before dilution amounted to SEK 0.23 (0.34)
- Operating profit (EBIT) amounted to SEK 10 (52) million
- Cash flow from operating activities amounted to SEK 196 (132) million
- Operating cash flow amounted to SEK 210 (165) million, corresponding to a cash conversion of 151% (92%)
Summarising comments by CEO Simon Göthberg
The first quarter has resulted in slightly lower net sales and profitability level compared to the same period last year. Vestum generated net sales of SEK 1,240 million and an adjusted EBITA of SEK 100 million, corresponding to an adjusted EBITA margin of 8.1%. Cash flow continued to develop very strongly, with an operating cash flow of SEK 210 million, equivalent to a cash conversion of 151%. Free cash flow per share grew by 96% during the quarter. The net financial debt remained unchanged at 2.5x, which is within our financial target. The first quarter is seasonally the smallest quarter for Vestum due to weather and the number of working days.
Demand for our products and services has generally been slightly lower than the previous year, with organic growth at -3.5%. This was partly influenced by seasonal effects, as Easter fell in March this year compared to April in the previous year, as well as strong reference figures. The difference in reported profits between the first quarter of 2024 and 2023 has been affected by non-recurring items of total SEK 22 million, of which SEK 14 million occurred in the first quarter of 2024. These items are primarily related to restructuring costs associated with office relocation and reorganisation in January 2024. The group generated an adjusted EBITA of SEK 100 million in the first quarter, compared to SEK 119 million in the same period last year.
In the Water segment, we offer specialised products that enhance water infrastructure and enable the optimisation of energy and water consumption. The development has been very strong, with organic EBITA growth of 39%, while the EBITA margin reached 19.8%, compared to 17.4% in the previous year. Growth was mainly driven by the UK market, where water levels have been high, benefiting our product supply. We expect continued positive development within this segment in the coming quarters.
The Services segment offers installations and products that contribute to reducing energy consumption in properties. Demand has continued to decrease, and we are currently at historically low levels. However, the segment maintains stable margins, generating an EBITA margin of 7.8% compared to 8.1% in the previous year. We see glimpses of increased investment willingness towards the second half of 2024 and note that a reduced interest rate would benefit the segment.
In the Infrastructure segment, we provide specialised work in selected parts of the infrastructure where investment needs are significant. Volumes have generally remained stable, but profitability has been lower in certain areas. The segment achieved an EBITA margin of 6.0% compared to 10.4% in the previous year. The lower profitability is partly due to some operations being between project completion and project start, and partly due to seasonal effects, as well as strong reference figures. During the quarter, we secured several significant projects related to railway work and urban infrastructure maintenance, and we anticipate a recovery in margins throughout the year.
The strategic review was completed after the quarter's end, and we are now stronger, more specialised, and with a new capital structure featuring a significantly higher proportion of bank financing, ready to once again pursue acquisitions. We are focused on growing the Water segment and see good opportunities to execute strategically important acquisitions primarily in the UK market.
We continue to see uncertainty regarding the economy, and the focus for 2024 is to continue to improve cash flow while maintaining profitability at good levels, while acquisitions are expected to contribute to growth.
The long-term demand for our services and products in infrastructure is driven by increased demand for infrastructure investments that meet new and higher requirements for accessibility, capacity, and sustainability. We feel confident in our ability to generate stable profitable growth over time.
The Interim Report is available on Vestum's website: https://www.vestum.se/en/ir/financial-reports/
For additional information, please contact:
Olof Andersson, CFO, Vestum AB (publ)
Email: olof.andersson@vestum.se
About Vestum
Vestum is an industrial group that provides services and products to the infrastructure sector. We have the most prominent specialists with extensive industry experience and strong positions in regional markets. With over 1,800 employees, we operate in Scandinavia and the United Kingdom.
For additional information, please visit: www.vestum.se
Vestum's share is traded under the short name VESTUM on Nasdaq Stockholm.
This information is information that Vestum AB (publ) 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 2024-05-03 07:00 CEST.
