Continued focus on improving profitability
 
July 1–September 30, 2025

• Net sales increased 1 percent to SEK 4,432 M (4,396). Organic growth was 1 percent. Currency effects had a negative impact of 2 percent on net sales.
• EBIT amounted to SEK 145 M (345) and the EBIT margin to 3.2 percent (7.4). EBIT was negatively impacted by items affecting comparability of SEK -71 M (23).
• Adjusted EBIT amounted to SEK 217 M (322) and the adjusted EBIT margin to 4.8 percent (7.2).
• Earnings per share, before and after dilution, amounted to SEK 0.10 (4.03).
• Cash flow from operating activities amounted to SEK 428 M (178).
• Precautionary amendments to loan agreements were secured from the company’s lenders during the quarter. The aim was to secure the company´s long-term financing and to enable the completion of strategic investments and the execution of the Annual General Meeting’s dividend decision.
• During the quarter, the option was exercised to redeem the remaining of 2021/2026 bonds outstanding. The total remaining amount that was redeemed during the quarter totaled SEK 518 M.

January 1–September 30, 2025

• Net sales increased 1 percent to SEK 13,502 M (13,396), where the increase was attributable to the acquisition of Elit Polska. Organic growth was -2 percent. Currency effects had a negative impact of 2 percent on net sales.
• EBIT amounted to SEK 397 M (776) and the EBIT margin to 2.9 percent (5.6). EBIT was negatively impacted by items affecting comparability of SEK -225 M (-127).
• Adjusted EBIT amounted to SEK 623 M (902) and the adjusted EBIT margin to 4.5 percent (6.6).
• Earnings per share, before and after dilution, amounted to SEK 0.83 (7.81).
• Cash flow from operating activities amounted to SEK 804 M (1,162).
• Net debt in relation to EBITDA¹⁾ increased to a multiple of 3.6 compared with 2.1 at the beginning of the year as a result of the earnings decline in the nine-month period.
  

Significant events after the end of the period

• The written procedure for MEKO’s bonds that was initiated on October 1 received strong support from bondholders and was approved. The procedure was initiated, because of certain terms and conditions of the bonds that need to be fulfilled, for the company to make the dividend distribution to its shareholders in November.

CEO comment

Continued focus on improving profitability

The third quarter demonstrated mildly positive organic sales growth, an improvement over the negative sales trends experienced earlier in the year. That said, the period continued to be marked by intense competition, which negatively impacted our earnings compared with the year-earlier quarter. In response we are working purposefully on a range of initiatives designed to strengthen MEKO’s position, growth and profitability.

MEKO’s business concept builds on enabling car owners to care for and use their vehicles for as long as possible. We operate through leading, well-known vehicle workshop chains in eight markets, which we serve with, inter alia, marketing and fast deliveries of spare parts leveraging a fine-meshed and high-tech distribution network.

Compared with many other industries, the business concept has been relatively stable over time. With that said, in the wake of a protracted economic downturn and unpredictable external developments, car owners exhibited increased restraint in the first half of 2025. This has led to only the most urgent repairs being performed – leading to tougher price competition.

Mildly positive organic growth
This competitive situation continued through the third quarter, where we reported overall organic growth of 1 percent, compared with 2 percent for the same quarter of 2024. This represented a concurrent move from negative growth in the first half of this year to a mildly positive trend. Improvements were noted in the Finland, Poland/the Baltics and Denmark business areas, while the trend was weaker in Sweden/Norway and Sørensen og Balchen.

Price competition impacts earnings
Increased price competition impacted the gross margin and earnings for the quarter. Adjusted EBIT totaled SEK 217 M, compared with SEK 322 M last year. The adjusted EBIT margin was 4.8 percent (7.2), up compared with the second quarter of this year when the corresponding figure was 3.8 percent.

Earlier in the year, we noted the impact of a weaker performance on the debt position since lower earnings increase our debt/equity ratio. Through proactive engagement with our lenders and bondholders, we have strengthened our financial flexibility by precautionary amendments to our agreements. Our debt/equity ratio at the end of the third quarter was 3.6, which exceeds our target range of 2.0–3.0 but is within the framework of the renegotiated loan covenants.

Several actions to boost growth and profitability
We are now fully focused on creating higher growth and profitability. One of the actions entails expanding the scope of the “Building a stronger MEKO” profitability initiative, which since its launch at the end of 2023 has delivered positive effects of around SEK 200 million:

• During the summer, the program was supplemented with further cost reductions of SEK 100 M – which are now being implemented according to plan. During the quarter, layoffs corresponding to 140 positions were carried out, with full financial effect expected in 2026.
• We expect our new, upgraded central warehouses to result in efficiency gains in 2026. These automated facilities will both take our logistics to a new level and create room for future growth. At present, we are still burdened by double costs for rents and for staff among other items.
• Work with our new ERP system is entering a new, less intensive phase, which remains a strategically important project to realize more synergies within the Group, among other benefits. We are now ensuring a complete and successful implementation in Poland, before moving on to the next market.

In addition, we are pursuing growth initiatives in areas such as commercial vehicles, a segment where we aim to reach the same leading position as in passenger cars. We are also increasing the pace of our work with our own brands, where we are broadening the product range to cover more categories and lower price segments. To meet growing demand in several customer segments, we are also expanding the Mekster E-commerce platform from Sweden and Norway to Finland and Denmark.

These measures, as we outlined in detail at our Capital Markets Day in September, are necessary. But they are also just examples of our broader work to strengthen MEKO’s long-term position, growth, and business model. Fundamentally, the need for mobility remains. Our new edition of the Mobility Barometer, which is the Nordic region’s largest measurement of mobility trends, shows that the car is consolidating its strong position in people’s daily lives. No other means of transportation comes close to its popularity.

This reinforces our conviction that our vision – to enable mobility today, tomorrow and in the future – remains as relevant as ever.

Pehr Oscarson
President and CEO