Earnings call transcript: Esperat Group's Q2 2025 revenue grows 5%, stock surges 19%

Esperat Group reported a robust Q2 2025, with revenue growing 5% year-on-year and Q2 EBITDA surging 38%, largely propelled by strong performance in its high-margin Solutions and Green Tech segments. Following the announcement, the company's stock climbed 19.36%, reflecting investor confidence in its strategic shift towards these profitable areas. Management reaffirmed its 2025 EBITDA guidance at the upper end of €63-71 million, citing positive Q3 momentum and active exploration of GreenTech M&A, signaling a confident outlook despite broader market uncertainties.

Analysis

Esperat Group (PRT) delivered a robust Q2 2025, validating its strategic pivot towards higher-margin businesses. The company reported a 5% year-on-year revenue increase, but the key highlight was a 38% surge in Q2 EBITDA, which offset a weaker Q1 and brought H1 EBITDA growth to 2% year-on-year. This performance was driven by the Solutions (Vivali) and Green Tech (ZeliaTech) divisions, which grew H1 gross sales by 12% and 26% respectively and now contribute nearly 80% of the group's total EBITDA. The market reacted positively, with the stock climbing 19.36% post-announcement. Management demonstrated a return to operational discipline by controlling Q2 SG&A growth to just 2%, a significant improvement from the 12% spike in Q1. While the outlook is optimistic, with the company guiding towards the upper end of its €63-71 million EBITDA forecast based on a strong start to Q3, a key challenge remains. The cash conversion cycle has lengthened, and the return on capital employed stands at a modest 6.6%, a weakness management has explicitly flagged as a primary focus for improvement. The company is also actively exploring M&A opportunities in the GreenTech sector to fuel future expansion.

Key Decisions for Investors

• Given the strong momentum in high-margin segments, a 38% Q2 EBITDA surge, and reaffirmed guidance at the upper end of the range, investors could view the stock favorably, supported by an attractive 8.62% dividend yield and a low P/E ratio of 8.77.
• The primary risk to monitor is working capital management; investors should watch for improvements in the cash conversion cycle and return on capital employed (ROCE), as progress in this area would be a significant de-risking catalyst.
• Future growth will be contingent on the continued outperformance of the Solutions and Green Tech divisions, a successful PC refresh cycle in H2 2025, and the execution of potential M&A in the GreenTech space.