Coor Service Management Holding AB (STO: COOR) Q2 2025 Earnings | 07/11/2025

Coor Service Management Holding AB (Coor) announced its Q2 2025 results, highlighting significant improvements in working capital, strong growth in Norway, and ongoing efforts to enhance operational efficiency across its operations.

Key Highlights:

• Improved Working Capital: Coor successfully reduced its working capital by SEK 113 million in the first half of 2025, a significant improvement compared to a SEK 142 million build-up in the same period last year. This restored net working capital to -7.5% as a percentage of LTM net sales, bringing the company close to its target of staying above -90%.

• Strong Cash Conversion: As a result of improved working capital, the LTM cash conversion improved to 88%, a 31% increase compared to the full year 2024, nearly meeting the company's target of over 90%.

• Leverage: Leverage increased to 2.9x after dividend payouts in the quarter. The company still plans for a share buyback program of SEK 50 million by March 2026, which was slightly postponed due to internal reorganization.

• Norway's Outstanding Performance:

  • Achieved 23% organic growth, largely driven by unusually high variable volumes from maintenance stops in the energy sector (contributing about half of the growth).

  • Adjusted EBITDA reached SEK 37 million with a 5.4% margin, showing strong improvement.

  • The company is actively pursuing opportunities in the Norwegian public sector, which represents a significant untapped market. While public sector contracts generally have lower margins, Coor is focused on quality-driven tenders that could allow for profitable growth.

  • Even excluding the exceptional variable volumes, Norway demonstrated margin expansion due to continued focus on operational efficiency.

• Denmark and Finland:

  • Denmark saw negative organic growth due to lower variable volumes and the upcoming end of the Velux contract by Q4. Peter Hasbach will assume the CEO role for Danish operations after the summer to focus on strengthening leadership and operational control. The Danish market is currently considered the least predictable, but Coor remains a top player and is working to improve stability.

  • Finland reported negative 1% organic growth due to the termination of a couple of smaller contracts, with adjusted EBITDA and margins remaining in line with the previous year.

• Organizational Changes and Efficiency:

  • The organizational restructuring initiated in the first half of the year is now complete, with a focus on strengthening leadership skills and clarifying responsibilities.

  • Investments in improving systems and support are ongoing to enhance overall operational efficiency.

  • The SEK 120 million cost savings program is roughly split between central and country-level reductions. The central costs are now back to more "normal" historic levels, and the company has not observed any detrimental effects from the reduction in employee numbers; instead, there's an increased focus on core operational questions.

• Market Outlook: While some segments are affected by the slower economic environment, demand from sectors like defense and energy remains strong. The company acknowledges the challenge in predicting how these factors will balance out.