Highlights of the period January – March 2025

• Net sales amounted to SEK 900 (991) million
• EBITA amounted to SEK 74 (67) million, corresponding to an EBITA margin of 8.2% (6.8%)
• Adjusted EBITA amounted to SEK 78 (81) million, corresponding to an adjusted EBITA margin of 8.7% (8.2%)
• EBITA per share before dilution amounted to SEK 0.20 (0.18)
• Operating profit (EBIT) amounted to SEK 6 (-3) million
• Cash flow from operating activities amounted to SEK 20 (137) million

Summarising comments by CEO Simon Göthberg
Vestum's focus on growth and investments in both organic initiatives and acquisitions has proved successful. In the first quarter, Vestum generated an organic growth of 3% while profitability strengthened. This is the first time in two years that existing operations have generated positive organic growth. In absolute terms, sales and adjusted EBITA decreased in the quarter, but this was entirely driven by divestments. After the end of the quarter, we acquired Nortech, a UK market leader in monitoring and control technology in the structurally growing energy and water distribution sector in the UK. The company generates high margins and high return on capital. The acquisition will be consolidated into Vestum from the second quarter. Leverage, expressed as financial net debt in relation to reported EBITDA, decreased in the quarter to 2.1x, which is within our financial target. Regarding concerns about the trade barriers that are being introduced worldwide, we can – although it creates some uncertainty about the economic outlook – conclude that Vestum has no direct exposure to these.

The Flow Technology segment continues to develop positively and generated a sales growth of 13%, driven by acquired growth. Demand has been stable in all markets. The EBITA margin decreased as expected in the quarter, driven by the acquisition of PDAS carried out in 2024, and amounted to 18.1%. After the end of the quarter, the acquisition of UK-based Nortech was completed, which constitutes a new platform for the segment. We know the company well as Nortech has, for a decade, delivered innovative monitoring and control technology to our existing operations within water pumps in the UK. The acquisition strengthens our position further within the energy and water distribution sector. We expect to make more acquisitions to the segment during the year.

In the Niche Products segment the positive growth trend continues and for the first time in two years we break negative growth to neutral development, while the EBITA margin improves from 9.7% to 10.0%. Certain parts of the segment continue to face a challenging market where we focus on improving profitability, while we are allocating capital to growth in other parts where the return on capital and demand remain high.

In the Solutions segment, we have divested several companies during the quarter, including the largest and the third largest company, meaning that sales in absolute terms decreased. The first quarter is seasonally the weakest quarter of the year. However, organic growth in the segment is positive, mainly driven by increased demand within our niched infrastructure services. Profitability strengthened in the quarter to an EBITA margin of 4.8%. We are foremost focused on continuing to improve profitability in the segment.

Cash flow decreased as expected in the quarter driven by increased investments in organic growth, increased working capital tie-up, and financial one-time costs related to the early redemption of Vestum's last outstanding bond. The investments relate to geographical expansion in both our UK operations within Flow Technology, where we have market-leading positions within water infrastructure, and within Niche Products in the Swedish market. The financial one-time costs amounted to SEK 25 million. Vestum's last twelve months free cash flow now includes just under SEK 40 million in financial one-time costs related to early redemption of bonds. Parts of these will be rolled out in the second quarter, while the interest cost savings from the improved capital structure established earlier this year, with significantly lower interest rates, will begin to be realised from April 2025. Vestum thus has no remaining bonds. Overall, we have created good conditions for free cash flow to increase going forward.

We are convinced that Vestum's strategy to generate growth both organically and through acquisitions, with gradually increased profitability, will generate solid returns over time. Over the past year, we have acquired niche market leaders with solid margins, high return on capital, and stable growth prospects. At the same time, existing operations are once again generating organic growth. New platform acquisitions will continue to be focused on leading companies in growing niches with high profitability and limited cyclicality.

The market situation continues to improve, although the global economy remains uncertain. As we are going into the second quarter we will begin to capitalise on the structural improvements that we have implemented over the last few years. This creates conditions for growth in both profits and cash flows, while we can strengthen the margin. We will continue on the path of disciplined capital allocation with focus on growth through both organic initiatives and acquisitions.

The Interim Report is available on Vestum’s website: https://www.vestum.se/en/ir/financial-reports/