Interim report Q1 2025

Stable earnings and significant increase in order intake

We began the year with a strong order intake mainly due to increased demand in the Nordic region ahead of the upcoming digging season. Order intake increased organically by 28 per cent and amounted to SEK 524 million (410). Net sales in the quarter amounted to SEK 446 million (394), an organic year-on-year increase of 14 per cent. The gross margin for the quarter amounted to 46 per cent (42) and was mainly attributable to higher volumes in production combined with a favourable product and market mix. Operating profit increased 40 per cent to SEK 84 million (60), corresponding to an EBIT of 19 per cent (15). Earnings were impacted by a negative currency effect due to the stronger SEK.

Strong demand ahead of the Nordic digging season

The Nordic region reports the strongest start to the year. The order intake amounted to SEK 231 million (156), corresponding to organic growth of 49 per cent. Net sales amounted to SEK 190 million (159), an organic increase of 21 per cent. We are seeing increasing positivity in the market among end customers while the inventory levels of dealers are relatively low.

The tiltrotator continues to gain ground in Europe and the order intake increased 20 per cent organically. Net sales increased 17 per cent to SEK 182 million (156). We are seeing increased awareness of our products and their advantages, which was particularly evident at the world’s largest and most visited trade exhibition, Bauma in Munich, where tiltrotators were represented by all major excavator manufacturers. Germany is also one of the countries in Europe where we are seeing a significant increase in demand. The trend demonstrates that more and more customers are moving from either tilt or rotation couplers, which have long been common in Germany, to full tiltrotator solutions.

Despite the turbulent situation in the US, order intake increased 19 per cent organically in the Americas, while net sales declined 14 per cent with low inventory levels holding back deliveries. We are now working to adjust inventory levels to meet demand in the region. It is currently difficult to assess how the future trend in the Americas will be impacted by the announced tariffs.

Order intake in Asia-Oceania declined 10 per cent from low levels. We are continuing to develop our Japanese sales company, which has had a strong start, and we are seeing an increase in order intake in Japan. In Australia, we are seeing a cautious market due to the upcoming federal election that will be held in May.

The future market outlook contains a high degree of unpredictability related in part to tariffs and their impact on the global economy. Despite this, we anticipate continued positive net sales growth in the Nordic region ahead of the upcoming digging season and continued stable growth in Europe related to increased market penetration. We did, however, experience minor disruptions in the supply chain in the quarter that could result in a slight delay of deliveries in the forthcoming quarter.

engcon at the forefront

In the first quarter, the Patent and Market Court of Appeal upheld the lower court’s previous ruling in the case between Rototilt and engcon regarding alleged patent infringement. Rototilt’s claim of patent infringement was rejected. As in the lower court, the court ruled that no patent infringement had occurred. The ruling is final and cannot be appealed, thus the matter is settled in Sweden.

The first model of our third generation tiltrotator, EC319, is now in production, and we plan start of delivery of the next model, EC309, which was launched at Bauma, in September. The third generation has been developed to meet the demands of future electrified and autonomous excavators, offering substantial energy savings. Its selflearning configuration is unique and ensures a driving experience tailored to the operator. User feedback has been positive, with those who have experienced the third generation in daily operations particularly emphasizing its smooth and responsive handling. With the third generation, we further consolidate our technological advantage over our competitors.

Despite a challenging business environment, we can reflect on a strong quarter in terms of earnings, with increased demand. We remain confident in our strong position, and with the launch of our third generation tiltrotator, we have strengthened our position at the forefront of technology in the industry. Bauma was a success and we are maintaining our focus on end customers. We are looking forward to the forthcoming European digging tour – engcon Dig Days 2025 – in which we will have the opportunity to follow up with our contacts from Bauma and show more end customers how our products enhance efficiency and profitability. This is how we change the world of digging.