* Q2: 3% sales growth, 1% adj. EBIT margin
* '25e-'27e adj. EBIT up SEK 2-4m
* Developing according to plan
Again taking a step forward
Tempest delivered another quarter of improvements, with sales 7% ahead of ABGSCe. Security Solutions (SS) grew by 4% y-o-y due to strong momentum and a broader, more stable consumer base. This was despite Q2'25 being the last quarter with the Scania contract in last year's comps. Adj. EBIT increased by SEK 1m, SEK 1m ahead of ABGSCe due to the divestment of Risk Solutions' US business and a positive contribution from Denmark. EBITDA in SS (5.6% EBITDA margin) decreased by SEK 3m to SEK 7m due to new contracts not yet operating at full potential profitability, though this is expected to improve going forward. EBIT was burdened by a SEK 10m one-off cost related to the cost-saving programme. We argue that this quarter marks another important milestone, demonstrating that the strategic vision is beginning to bear fruit, even though it is not yet complete.
'25e sales up 2% and positive adj. EBIT expected
We raise our '25e sales by 2% on the back of the stronger than expected Q2 with good momentum in SS. We expect progress to continue as the US is gone, while Denmark and the UK are making progress. Q3 is also the first quarter in which the Scania contract is not included in the comps. We anticipate that the strong order intake and improved profitability of new contracts in SS will continue. Based on this, we expect positive EBIT in Q3 and have increased '25e adj. EBIT to SEK 2m.
Expecting the momentum to continue
Tempest is now in the middle of its strongest season (Q2 & Q3), and we believe there are further efficiencies to be gained from the newly signed contracts in SS, as profitability typically increases gradually following the initial start-up period. This is because the additional costs associated with extra hiring decrease, and Tempest can sell additional services that improve profitability.
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