Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fasadgruppen Group AB (FRA:83A, Financial) reported stable development in Denmark, Norway, and Finland, indicating strong performance in these regions.
- The integration of Clear Line has been successful, positively impacting results and increasing the order backlog.
- The company has implemented a new organizational structure to improve efficiency and governance, aiming to enhance performance.
- Fasadgruppen Group AB (FRA:83A) has converted its credit facilities into a sustainability-linked loan, aligning with environmental goals.
- The acquisition of Clear Line and Liab Plåtbyggarna provides strategic growth opportunities and strengthens the company's market position.
Negative Points
- The Swedish operations experienced an unusually weak fourth quarter, significantly impacting overall performance.
- Net sales decreased by 1.6%, with a sharp organic decline of 50.6% in Sweden due to low demand and seasonal effects.
- The adjusted EBITA margin declined to 6.4% from 9.1% the previous year, primarily due to challenges in the Swedish market.
- The company's net debt to adjusted EBITDA pro forma increased to 3.3 times, prompting a focus on reducing leverage.
- The board proposed no dividend for 2024 and removed the dividend policy, reflecting financial challenges and a focus on debt reduction.
Q & A Highlights
Q: Can you elaborate on the organizational changes in Sweden and why they are being implemented now?
A: Martin Jacobsson, CEO, explained that the weak Q4 results prompted the need for closer proximity to subsidiaries. The new structure aims to enhance efficiency by getting closer to operations, especially given the challenging market conditions in Sweden.
Q: What cost savings are expected from the new organizational measures, and when will they take effect?
A: Martin Jacobsson, CEO, estimated potential savings in the range of $10 million to $20 million, with full effects likely visible in about a year. The exact impact on efficiency is still to be determined.
Q: Why proceed with the acquisition of Liab despite focusing on improving existing subsidiaries' profitability?
A: Martin Jacobsson, CEO, stated that Liab is a unique asset with minimal impact on covenant figures. The acquisition had been in discussion for several years, and its strong order backlog was a significant factor in the decision.
Q: How should we interpret the increase in order backlog margin, and when will it reflect in profitability?
A: Martin Jacobsson, CEO, noted a 100 basis point increase in order backlog margin from Q3 to Q4 2024, excluding Clear Line. However, the full impact on profitability is uncertain due to competitive pressures and customer price sensitivity.
Q: What was Clear Line's EBITA contribution in the quarter?
A: Martin Jacobsson, CEO, confirmed that Clear Line's EBITA was close to its adjusted EBITA, with no significant adjustments in the quarter. Detailed performance can be found in note 8 of the business acquisitions.
Q: When do you expect an uplift in the Swedish market?
A: Martin Jacobsson, CEO, cautiously projected potential improvements in the second half of 2025, but emphasized that it is too early to make definitive predictions.
Q: Can you explain the high tax expense in the quarter?
A: Martin Jacobsson, CEO, attributed the high tax expense to non-deductible costs, including goodwill and trademark write-downs, and acquisition costs, which were significant compared to the weak pre-tax results.
Q: Would net profit be positive without the one-off costs?
A: Martin Jacobsson, CEO, suggested that net profit might be positive without the one-off costs, but this would need to be double-checked for accuracy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
