Main message: back to growth mode
Vestum held its CMD on 27 March and the initial parts were dedicated to explaining the transformation journey the company has gone through in the last couple of years, including divesting service companies with a lower level of specialisation and margins while also de-levering. This has resulted in the group's share of EBITA from product companies increasing from ~30% to ~60% while the financial net debt has decreased from SEK 2.8bn to SEK 1.4bn between 2022 and 2024. With this, we think the quality of the business has increased. The remaining debt has also been refinanced to bank loans, rendering significantly lower interest rates which we expect will improve the cash conversion in 2025 (management said rolling financial expenses could reach ~SEK 75m in 2025, vs SEK 197m in 2024). All in all, the company is now done playing defence and has positioned itself to accelerate growth in 2025. Mr. Göthberg ensured this will be done with a religious focus on cash generation and capital efficiency to improve ROCE, which we find encouraging.
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