CEO Comments
CEO Comments
Read Managing Director and CEO André Strömgren’s comments from Wall to Wall’s Year-to-end report.
Continued cautious market in the fourth quarter of the year
The fourth quarter was marked by a continued cautious market for property owners and housing cooperatives’ willingness to invest, with a corresponding impact on the company’s operations in pipe relining and energy. The market for these areas continues to strengthen even if the energy operations experienced project delays over the turn of the year. As throughout the year, flushing services continued to develop strongly with stable demand from customers requiring ongoing maintenance.
Net revenue amounted to SEK 238.6 (274.7) million, a decrease of 10.2 percent on a comparable and currency-adjusted basis, adjusted for discontinued operations. The decrease is entirely attributable to lower activity in pipe relining and energy. The adjusted EBITA margin improved 5.3 (4.3) percent due to an overall solid performance in flushing services and continued improvements in Finland. Our focus on streamlining operations resulted in a reduction in indirect costs by 11.1 percent compared to the previous year, a structural improvement we carry with us into 2025. There is, however, still work to be done in this area.
Full year 2024
In 2024, we navigated a challenging market that gradually improved as the year progressed. Despite this cautiously positive trend, activity levels for the year were lower, primarily because the energy and pipe relining businesses operate with planned projects that take time to materialize into revenue.
For the full year, net revenue amounted to SEK 918.5 (956.1) million, a decrease of 5.3 percentage on a comparable and currency-adjusted basis, adjusted for discontinued operations.
In terms of geography, Denmark and Norway contributed positively to results compared to the previous year, while Sweden and Finland showed weaker performance. Flushing services had a strong year with both increased net revenue and margins. As mentioned above, this reflects the market dynamics where property owners’ reluctance to invest in planned maintenance has a direct impact on the demand for ongoing maintenance. This also leads to pent-up demand, suggesting much stronger demand for pipe relining and energy in the coming years.
Despite a challenging market, our focus on profitable projects and businesses has yielded results. The gross margin increased to 34.7 percent, compared to 34.5 percent the previous year and 34.3 percent in 2022.
Our efforts to reduce indirect costs, which fell by 5.7 percent during the year, had a positive impact but did not fully offset the lower activity levels. As a result, the adjusted EBITA margin for the full year was lower at 4.0 percent compared with 6.1 percent the previous year. This decline is entirely attributable to negative economies of scale caused by the market conditions throughout the year. However, continued improvements in gross margins and lower indirect costs provide good opportunities for rapid improvements in an expected stronger market environment going forward.
André Strömgren, CEO & CFO Wall to Wall Group
For full year-end report, see appendix.
Contacts
André Strömgren, CFO
+46 (0) 70 841 07 96
