Latest news with #EBITAMargin
Yahoo
21-07-2025
- Business
- Yahoo
Nolato AB (FRA:NBF) Q2 2025 Earnings Call Highlights: Strong Growth Amid Currency Challenges
Revenue: SEK2.4 billion, with a currency-adjusted organic growth of 4%. EBITA Margin: Increased by 1.6 percentage points to 11.6%. Operating Profit: Increased by 13% to SEK277 million. Medical Solutions Sales: SEK1.350 million, a 5% increase adjusted for currency. Medical Solutions Operating Profit: SEK170 million. Engineered Solutions Sales: Increased by 1% adjusted for currency. Engineered Solutions EBITA Margin: 11.2%, an increase of 1.2 percentage points. Effective Tax Rate: Decreased to 20.3%. Net Investments: SEK188 million, with high CapEx for expansion in Hungary. Cash Flow After Investments: SEK128 million, compared to SEK336 million last year. Earnings Per Share: Increased to SEK0.79 from SEK0.63 last year. Return on Capital Employed: Increased to 13.4%. Net Financial Liabilities to EBITDA: 0.7x after dividends of SEK404 million. Warning! GuruFocus has detected 6 Warning Signs with FRA:NBF. Release Date: July 18, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Nolato AB (FRA:NBF) reported a currency-adjusted organic growth of 4% in sales, reaching nearly SEK2.4 billion. The EBITA margin increased by 1.6 percentage points to 11.6%, with operating profit rising by 13% to SEK277 million. The Medical Solutions business area saw a 5% increase in sales, adjusted for currency, and an operating profit increase to SEK170 million. The company is expanding its operations in Hungary and establishing new operations in Malaysia to support growth in Asia. Earnings per share increased to SEK0.79 from SEK0.63 the previous year, indicating improved profitability. Negative Points Nolato AB (FRA:NBF) faced strong currency headwinds, impacting financial performance. The automotive market within the Engineered Solutions business area is experiencing weaker market conditions. High capital expenditures, particularly for expansion in Hungary, resulted in a decrease in cash flow after investments to SEK128 million from SEK336 million. The company is still working on improving margins in the US, which are currently below the rest of the segment. Overcapacity issues in China have not yet been fully resolved, affecting utilization rates. Q & A Highlights Q: In the Medical Solutions segment, you reported 5% organic growth. Can you elaborate on the growth drivers and the importance of the eye business to the group's sales and profitability? A: The eye business is not a significant part of the group but has shown good growth this quarter. The profitability aligns with our business area targets. This growth is due to additional business with existing customers. Q: Could you provide details on the expansion in Malaysia, particularly regarding its impact on production and whether it will replace any Chinese operations? A: The expansion in Malaysia adds 3,500 square meters and focuses on consumer electronics for Engineered Solutions and drug delivery products for Medical Solutions. It is an addition for new growth opportunities, not a replacement for Chinese operations. Q: The Medical segment showed impressive margins this quarter. Can you explain the factors contributing to this improvement and the role of the US market? A: The margin improvement is due to broad-based efforts, including pricing, cost adjustments, and efficiency improvements. The US market is part of this improvement, but the overall margin enhancement is a result of global efforts. Q: Regarding Engineered Solutions, how is the overcapacity issue in China affecting margins, and is it resolved? A: The overcapacity issue in China is improving and contributing to margin improvements. While not yet at the business area target, there is still room for further improvement. Q: With the recent margin improvements, are there still opportunities for further margin increases, or are they becoming limited? A: While the recent speed of margin improvement has been high, we are confident in reaching our midterm target of 12% for the group. Future improvements may not be as rapid, but we are on track to meet our goals. Q: With ongoing expansion investments, should we expect above-average CapEx in 2026 as well? A: While it's early to predict exact numbers, we anticipate continued high growth, which will require additional CapEx. Although 2025 has seen high CapEx, we expect a decline in 2026, but it will remain above previous levels. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
18-07-2025
- Business
- Yahoo
Tomra Systems ASA (TMRAF) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strong ...
Revenue: EUR 325 million, down 2% compared to Q2 last year. Collection Revenue: EUR 169 million, down 12% year-over-year. Recycling Revenue: EUR 57 million, stable compared to Q2 last year. Food Revenue: EUR 94 million, up 15% year-over-year. Gross Margin: 44%, in line with Q2 last year. EBITA Margin: 15%, including special items. Order Intake - Recycling: Down 37% year-over-year, ending at EUR 41 million. Order Backlog - Recycling: Down 20%, ending at EUR 107 million. Order Intake - Food: EUR 106 million, up 28% year-over-year. Order Backlog - Food: EUR 137 million, up 15% year-over-year. Cash Flow from Operations: EUR 17 million for the quarter, down from EUR 34 million last year. Equity Ratio: 35%. Gearing: 1.8 times. Return on Capital Employed: Above 18% long-term target. Warning! GuruFocus has detected 2 Warning Sign with TMRAF. Release Date: July 17, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Tomra Systems ASA (TMRAF) reported a record quarterly EBITA and order intake in its Food division, with an all-time high order backlog. The company experienced a 15% revenue increase in the Food division, driven by strong order intake across all regions and categories. Collection division revenues in existing markets grew by 5% in the first half of the year, aligning with strategic ambitions. Tomra Systems ASA (TMRAF) maintains strong cost control across divisions, with OpEx slightly down compared to the previous year. The Metals Recycling segment performed well, contributing positively to the company's overall performance. Negative Points Recycling division faced weak order intake due to challenges in the plastic segment and macroeconomic uncertainties. The Collection division saw a 12% revenue decline due to the timing of new market activities, particularly in Europe. The company is experiencing delays in customer investment decisions in the US due to tariff uncertainties. Gross margins in the Recycling division were weak due to an unfavorable product mix, impacting overall profitability. Tomra Systems ASA (TMRAF) faces risks in its Food business linked to macroeconomic conditions and potential tariff impacts. Q & A Highlights Q: Are you able to meet your revenue expectations for Recycling this year given the decline in order backlog and conversion ratio? A: Tove Andersen, CEO: Year-to-date, we have had revenues in Recycling of over EUR100 million. We have indicated a 40% conversion ratio of the order backlog for the coming quarter. However, the market is uncertain due to macroeconomic conditions and tariffs, which will affect 2025 revenues. Q: With strong margin development in Food, are the full-year targets too conservative? A: Tove Andersen, CEO: The profitability in Food is strong due to volume, product mix, and business mix. Despite improvements from the cost reduction program, we still target an EBITA of 10% to 11% for the full year. Q: Can you provide an update on the progress in Poland for Collection? A: Tove Andersen, CEO: We have a strong team in Poland and have signed some contracts. The business model is leaning towards sales and service. We are confident in our competitive positioning due to our extensive experience and product offerings. Q: What is the expected tariff impact on Food in Q3? A: Eva Sagemo, CFO: Tariffs might impact margins going forward, depending on order backlog and terms. We are adjusting production capabilities to mitigate tariff impacts by producing in Europe what was previously made in China. Q: How do you expect gross margins in Collection to develop through the year? A: Eva Sagemo, CFO: Gross margins should stay above 40%, with variations depending on sales mix. We expect new market activity in Poland and Portugal to impact margins in the second half. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-07-2025
- Business
- Yahoo
Telefonaktiebolaget L M Ericsson (ERIC) Q2 2025 Earnings Call Highlights: Navigating Growth ...
Organic Sales Growth: 2% year-over-year. Gross Margin: 48%, up from 43.9% in Q2 last year. EBITA Margin: 13.2%, a three-year high. Net Sales: SEK 56.1 billion, with a reported decline of 6% due to currency impact. IPR Revenue: Increased to SEK 4.9 billion from SEK 3.2 billion in Q1. Operating Expenses: SEK 20 billion, around SEK 3 billion lower than last year. Free Cash Flow Before M&A: SEK 2.6 billion. Networks Sales: Decreased by 5% year-on-year to SEK 35.7 billion. Networks Adjusted Gross Margin: 49.5%. Cloud and Software Services Sales: Declined by 5% year-on-year to SEK 14.4 billion. Enterprise Sales: Decreased by 14%, with organic sales down 6%. Net Cash: Decreased by SEK 2.6 billion compared to the previous quarter. Warning! GuruFocus has detected 4 Warning Sign with ERIC. Release Date: July 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) reported a 2% organic sales growth in Q2 2025, with significant contributions from the Americas and IPR segments. The company achieved a three-year high in EBITA margin at 13.2%, demonstrating strong execution against operational and strategic priorities. Gross margin improved to 48%, with broad-based margin improvements across all segments. The company successfully signed up all three operators in Japan for its joint venture Aduna, expanding its market coverage. Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) is investing in AI and 5G stand-alone networks, which are expected to drive future growth and innovation in connectivity solutions. Sales in Southeast Asia, Oceania, and India decreased by 22% year over year, primarily due to temporary pauses in network investments in India. The company faced a negative currency impact of SEK4.7 billion due to the strengthening of the Swedish krona against the US dollar and other currencies. Sales in Northeast Asia declined by 15%, attributed to reduced customer investments in some 5G front-runner markets. Free cash flow before M&A was SEK2.6 billion, down compared to last year, partly due to lower inventory levels and completion of large-scale rollout projects. Restructuring costs are expected to remain elevated during the year, impacting overall financial performance. Q: Can you explain the dynamics behind the robust gross margin guidance for the network's business in the next quarter? Are there specific deals or mix shifts contributing to this? A: The margin outlook is based on the current product and market mix, not related to IPR. It's more about the underlying margins we see coming into the quarter. We don't have high expectations for India in Q3 due to the temporary pause in investments. Q: How do you see operating expenses (OpEx) trending for the rest of the year? A: The cost reduction activities from the past year are now reflected in our OpEx. We expect a similar level of OpEx in the second half of the year, with some seasonality potentially leading to higher costs. It takes time for cost reductions to fully impact the numbers. Q: Can you provide more details on the tariff-related effects during the quarter and expectations for Q3? A: The impact of tariffs was around 1 percentage point, slightly lower than expected. We anticipate similar levels going forward, given current information. We are preparing for potential changes but have not made any major investment decisions yet. Q: Could you elaborate on the trends in the North American market, particularly regarding inventory levels and mix changes? A: Inventory levels among operators are fairly balanced. We expect more services and rollout activities to contribute to revenue. While there may be quarterly margin shifts, we anticipate stable development for the full year. Q: How do you see 5G standalone and AI investments impacting your business and product mix? A: 5G standalone is crucial for low latency and high-speed applications, but deployments are still limited. AI is fundamental for network operations and efficiency. We expect AI to drive traffic and connectivity needs as applications move to the edge. Q: What opportunities do you see in defense and 5G for such areas? A: There is substantial potential for 5G technology in defense, as it can connect equipment and sensors. We are engaged in discussions globally and have launched the Ericsson Federal Technology Group in the US. Mission-critical applications for first responders also present significant opportunities. Q: What measures are you taking to mitigate tariff impacts, and are there plans to realign your supply chain? A: We are preparing for potential changes but have not made firm decisions due to uncertainty. We are exploring options to adjust our supply chain and have already built a factory in the US to increase flexibility. Q: Can you elaborate on your confidence in gaining market share, particularly in the North American market? A: We are focusing on strengthening our position in key markets like the US, India, and Japan. Investments in local R&D and manufacturing facilities are part of our strategy to enhance market presence and competitiveness. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
16-07-2025
- Business
- Yahoo
Telefonaktiebolaget L M Ericsson (ERIC) Q2 2025 Earnings Call Highlights: Navigating Growth ...
Organic Sales Growth: 2% year-over-year. Gross Margin: 48%, up from 43.9% in Q2 last year. EBITA Margin: 13.2%, a three-year high. Net Sales: SEK 56.1 billion, with a reported decline of 6% due to currency impact. IPR Revenue: Increased to SEK 4.9 billion from SEK 3.2 billion in Q1. Operating Expenses: SEK 20 billion, around SEK 3 billion lower than last year. Free Cash Flow Before M&A: SEK 2.6 billion. Networks Sales: Decreased by 5% year-on-year to SEK 35.7 billion. Networks Adjusted Gross Margin: 49.5%. Cloud and Software Services Sales: Declined by 5% year-on-year to SEK 14.4 billion. Enterprise Sales: Decreased by 14%, with organic sales down 6%. Net Cash: Decreased by SEK 2.6 billion compared to the previous quarter. Warning! GuruFocus has detected 4 Warning Sign with ERIC. Release Date: July 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) reported a 2% organic sales growth in Q2 2025, with significant contributions from the Americas and IPR segments. The company achieved a three-year high in EBITA margin at 13.2%, demonstrating strong execution against operational and strategic priorities. Gross margin improved to 48%, with broad-based margin improvements across all segments. The company successfully signed up all three operators in Japan for its joint venture Aduna, expanding its market coverage. Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) is investing in AI and 5G stand-alone networks, which are expected to drive future growth and innovation in connectivity solutions. Sales in Southeast Asia, Oceania, and India decreased by 22% year over year, primarily due to temporary pauses in network investments in India. The company faced a negative currency impact of SEK4.7 billion due to the strengthening of the Swedish krona against the US dollar and other currencies. Sales in Northeast Asia declined by 15%, attributed to reduced customer investments in some 5G front-runner markets. Free cash flow before M&A was SEK2.6 billion, down compared to last year, partly due to lower inventory levels and completion of large-scale rollout projects. Restructuring costs are expected to remain elevated during the year, impacting overall financial performance. Q: Can you explain the dynamics behind the robust gross margin guidance for the network's business in the next quarter? Are there specific deals or mix shifts contributing to this? A: The margin outlook is based on the current product and market mix, not related to IPR. It's more about the underlying margins we see coming into the quarter. We don't have high expectations for India in Q3 due to the temporary pause in investments. Q: How do you see operating expenses (OpEx) trending for the rest of the year? A: The cost reduction activities from the past year are now reflected in our OpEx. We expect a similar level of OpEx in the second half of the year, with some seasonality potentially leading to higher costs. It takes time for cost reductions to fully impact the numbers. Q: Can you provide more details on the tariff-related effects during the quarter and expectations for Q3? A: The impact of tariffs was around 1 percentage point, slightly lower than expected. We anticipate similar levels going forward, given current information. We are preparing for potential changes but have not made any major investment decisions yet. Q: Could you elaborate on the trends in the North American market, particularly regarding inventory levels and mix changes? A: Inventory levels among operators are fairly balanced. We expect more services and rollout activities to contribute to revenue. While there may be quarterly margin shifts, we anticipate stable development for the full year. Q: How do you see 5G standalone and AI investments impacting your business and product mix? A: 5G standalone is crucial for low latency and high-speed applications, but deployments are still limited. AI is fundamental for network operations and efficiency. We expect AI to drive traffic and connectivity needs as applications move to the edge. Q: What opportunities do you see in defense and 5G for such areas? A: There is substantial potential for 5G technology in defense, as it can connect equipment and sensors. We are engaged in discussions globally and have launched the Ericsson Federal Technology Group in the US. Mission-critical applications for first responders also present significant opportunities. Q: What measures are you taking to mitigate tariff impacts, and are there plans to realign your supply chain? A: We are preparing for potential changes but have not made firm decisions due to uncertainty. We are exploring options to adjust our supply chain and have already built a factory in the US to increase flexibility. Q: Can you elaborate on your confidence in gaining market share, particularly in the North American market? A: We are focusing on strengthening our position in key markets like the US, India, and Japan. Investments in local R&D and manufacturing facilities are part of our strategy to enhance market presence and competitiveness. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-06-2025
- Business
- Yahoo
Ferguson Enterprises (FERG) Initiated at Goldman Sachs with ‘Buy' Rating and $280 Price Target
Ferguson Enterprises Inc. (NYSE:FERG) is one of the 11 best industrial stocks to buy right now. On June 18, Goldman Sachs initiated coverage of the stock with a 'Buy' rating and a $280 price target. The investment bank's bullish stance is in response to improving pricing trends and execution at the company. A busy warehouse stocked with a variety of industrial plumbing parts. In its third quarter of fiscal 2025, Ferguson Enterprise delivered a 5% organic growth as pricing turned flat after six consecutive quarters of deflation. Improving price trend and execution triggered a 50 basis point year-over-year improvement in third quarter gross margin. Goldman Sachs expects the company's EBITA margin to come at the top end of the new guidance of 8.5% to 9%. The improvement should be driven by improved commodity pricing and finished good pricing. Additionally, the investment bank expects Ferguson Enterprise to benefit from the inflationary impact of US tariffs. Ferguson Enterprises Inc. (NYSE:FERG) is an industrial company that distributes plumbing and heating products. It also provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, to residential and non-residential customers. While we acknowledge the potential of FERG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Sign in to access your portfolio
