Interim Report January-June 2026

Q2 2026 order backlog rose to SEK 22.4B (from SEK 20.7B), but net sales fell 2.4% to SEK 6,511M (SEK 6,674M) and organic growth adjusted for calendar effects was -5.3%. Profitability is improving only modestly: EBITA excluding items was SEK 434M (SEK 438M) with EBITA margin up slightly to 6.7% (from 6.6%). Overall, momentum is mixed—backlog strength offsets weaker sales, leaving a profitability uplift still ahead.

Analysis

The key signal is not the backlog itself, but that order visibility is improving faster than monetization. In businesses driven by utilization, the first leg of recovery is usually margin protection, not revenue acceleration; until billable hours absorb fixed overhead, backlog expansion can coexist with flat-to-down sales. That means the next 1-2 quarters matter more than the headline quarter: if utilization does not move materially above the low-70s, the market should discount the backlog as a timing buffer rather than a durable growth inflection.

The second-order effect is competitive. Firms with higher fixed-cost leverage and weaker balance sheets will feel the drag first if demand remains soft, because they cannot hold margins without a utilization rebound. Conversely, better-capitalized peers with stronger pricing discipline can use this window to take share, especially if customers keep extending project decision cycles. The fact that EBITA is stable despite softer revenue suggests cost flexibility is decent, but it also caps upside until pricing and mix improve.

Contrarian takeaway: consensus may be over-weighting backlog as a leading indicator while under-weighting the organic decline. Backlog can be inflated by slower execution, not just stronger demand, and the real test is whether conversion improves without margin leakage. The thesis is falsified if next quarter shows higher utilization above roughly 75%-76% plus positive organic growth; otherwise this remains a ‘wait for proof’ setup rather than an earnings breakout story.

Key Decisions for Investors

• No immediate directional trade: treat this as a hold-the-line quarter, not a confirmed inflection. Reassess only after the next print if utilization does not move above 75%-76% and organic growth stays negative.
• Watch for margin-led re-rating in the next 1-3 months; if peer companies with similar service exposure report better utilization conversion, rotate toward the higher-margin, better-capitalized names and avoid lower-quality laggards.
• If a sector basket is available, prefer long higher-quality business/technical services and short more cyclical staffing/contractor exposure on any bounce; the spread should widen if demand remains choppy and pricing stays soft.
• Set a downside alert on any further revenue deterioration without backlog conversion: that would imply the backlog is timing-related rather than demand-driven and would likely pressure the multiple over the next 1-2 quarters.