Year-end report: Margins continued to strengthen, strong cash flow and launch of new products according to plan

CTEK reported Q4 (Oct–Dec 2025) net sales of 209 MSEK versus 279 MSEK a year earlier (organic decline ~21% driven by the ended GM cooperation, adverse FX and weaker North American demand), while gross margin expanded to 63.2% from 49.8%. Adjusted EBITA rose to 30 MSEK (margin 14.3% vs 9.1%), operating cash flow strengthened to 131 MSEK (59), and net leverage improved with a debt/equity ratio of 1.2 (1.8), giving the group more financial flexibility. Management highlighted planned Low Voltage product launches completed and EVSE rollouts planned, indicating operational improvements despite top-line headwinds.

Analysis

Market structure: CTEK (CTEK.ST) is a direct beneficiary of margin-led restructuring — gross margin rose to 63.2% from 49.8% and operating cash flow more than doubled to 131 MSEK, implying improved pricing/mix and working-capital discipline even with organic sales down ~21% QoQ. Losers include OEM-dependent contract channels (GM the cited partner) and low-margin commodity charger suppliers who may lose share as CTEK focuses on higher-margin Low Voltage and upcoming EVSE launches. Pricing power appears to be increasing for CTEK; if launches convert 10–20% of lost GM volume into direct-channel higher-margin sales, EPS leverage will be material in 2–4 quarters. Broader impacts: reduced default risk should tighten CTEK credit spreads (positive for corporate bond holders), limit implied equity volatility, and keep FX exposure (negative currency effects noted) as a watch item for margins.

Key Decisions for Investors

• Establish a 2–3% long position in CTEK (CTEK.ST) within 2–6 weeks, scaling in if the share price falls 5–10% post-audiocast; target a 6–12 month hold to capture EVSE launch uptake and margin tailwinds, trim if adjusted EBITA margin falls below 10% or operating cash flow declines >20% QoQ.
• Buy a 3–6 month call spread on CTEK (10%–25% OTM depending on cost) to lever upside from successful EVSE launches while capping downside; alternatively sell cash-secured puts 5% OTM if yield on capital is attractive and willing to accumulate equity at that level.
• Pair trade: long CTEK (2% weight) vs short Blink Charging (BLNK, 1% weight) to express relative strength in margin-led hardware players versus loss-making EVSE operators; re-evaluate after 2 quarters or if BLNK’s adjusted gross margin improves >300bps.
• Reduce exposure by 25% to OEM-concentrated suppliers in autos (example: reduce holdings in NYSE:GM suppliers with >25% revenue concentration to single OEM) and reallocate into specialty automotive components and industrials with >20% gross margin and positive free cash flow yields >5%.