Earnings call transcript: Nimbus Group Q2 2025 sees revenue dip, stock falls

Nimbus Group AB reported a challenging Q2 2025, with sales down 8% to 571 million SEK and EBITDA declining significantly to 25 million SEK, primarily attributed to currency fluctuations and lower production volumes, leading to a 2.63% pre-market stock drop. Despite these headwinds, the company improved operating cash flow to 90 million SEK and initiated a 20 million SEK quarterly cost reduction program. Management expressed confidence, indicating they believe the company has "reached the bottom" and anticipates revenue growth from Q3 onwards, supported by improved order intake in North America and Europe, and potential future sales to the Swedish Armed Forces, while maintaining long-term targets for 10% growth and EBITDA margin.

Analysis

Nimbus Group AB's second-quarter 2025 performance reflects significant operational and market headwinds, with sales declining 8% year-over-year to 571 million SEK and EBITDA falling sharply to 25 million SEK from 45 million SEK. The contraction was driven by adverse currency fluctuations, which had a SEK 10 million negative impact, and lower production volumes amid a soft global boat market. Consequently, the gross margin compressed by 3.7 percentage points to 11.9%. Despite these challenges, the company demonstrated operational resilience by improving operating cash flow to 90 million SEK from 79 million SEK and initiating a cost reduction program targeting 20 million SEK in quarterly savings. Forward-looking indicators present a more optimistic picture; order intake increased to 356 million SEK, surpassing the previous year, with management noting that approximately 70% of this growth is organic. CEO Jan Erik Lindstrom stated a belief that the company has "reached the bottom" and anticipates revenue growth from Q3 onwards, supported by an expanding dealership network and a potential major order from the Swedish Armed Forces in 2026. This positive outlook, however, is tempered by ongoing risks including tariff uncertainty and global economic softness.

Key Decisions for Investors

• Investors should weigh the weak Q2 financial results, specifically the margin compression and 8% sales decline, against positive forward-looking signals like improved operating cash flow and a stronger order book, which may indicate a near-term inflection point.
• Monitor the execution and impact of the new cost-reduction program, which targets 20 million SEK in quarterly savings, as its success is critical for rebuilding profitability and achieving the company's 10% EBITDA margin goal.
• Consider management's optimistic guidance for a revenue rebound from Q3, but maintain a cautious stance due to significant external risks, including currency volatility and reliance on a broader market stabilization to achieve its targets.