KH Group Plc’s Business Review January–March 2025: Moderate growth and improving profitability

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KH Group Plc
Stock Exchange Release 6 May 2025 at 8:00 am EEST

KH Group Plc’s Business Review January–March 2025: Moderate growth and improving profitability

This is the summary of the Business Review for January–March 2025. The full Half-Year Report is attached to this release and is also available on the company’s website at www.khgroup.com.

KH Group, January–March 2025 IFRS

• Net sales amounted to EUR 41.8 (40.4) million. HTJ and Indoor have been retrospectively classified as discontinued operations.
• Comparable operating profit was EUR 0.2 (-0.1) million.
• Operating profit was EUR -0.1 (-0.5) million.
• Net profit for the period from continuing operations was EUR -0.4 (-1.7) million.
• Earnings per share (undiluted and diluted) from continuing operations were EUR -0.01 (-0.03).
• Equity per share at the end of the review period was EUR 0.85 (1.30).
• Return on equity for rolling 12 months was -43.4% (-19.2%).
• The Group’s cash and cash equivalents amounted to EUR 4.5 million at the end of the review period.
• Gearing at the end of the review period was 291.3% (225.3%).
• Gearing excluding lease liabilities was 187.9% (141.6%).

CEO Ville Nikulainen:

"The Group’s net sales and operating profit from continuing operations increased moderately year-on-year during the January–March review period. KH-Koneet’s net sales and operating profit increased in both Finland and Sweden in spite of the weakened market situation. Sales of heavy crawler excavators in Finland, in particular, grew significantly year-on-year. Nordic Rescue Group’s net sales declined, but operating profit for the first quarter was on a par with the comparison period. The financial situation of the wellbeing services counties became clearer after the turn of the year and, as a result, the order book for Nordic Rescue Group's operations in Finland strengthened during the review period. In Sweden, the demand for rescue vehicles has remained at a good level.

In Indoor Group, the general uncertainty in the market continued to have a negative impact on net sales and operating profit. The extensive operating model reform programme to improve Indoor Group’s profitability targets an annual improvement in operating profit of at least EUR 10 million by the end of 2026. A significant part of the targeted profitability improvement is estimated to be realised already during 2025. The change negotiations concluded in December 2024 will generate annual savings in wage costs of approximately EUR 6–7 million, which will improve the company's result significantly already during the second quarter.

As a strategic measure, KH Group announced in March 2024 that it had initiated a sale process for Indoor Group. KH Group has engaged a financial advisor to explore various options for its Indoor Group shareholding. No final decision has been made on the sale of Indoor Group holdings and there is no certainty as to the timing, terms or completion of any such transaction. KH Group aims to complete the process during 2025. Another strategic step was completed in March 2025 as KH Group acquired the remaining KH-Koneet Group Oy minority shares in accordance with the shareholder agreement and KH-Koneet is now a fully-owned subsidiary of KH Group. The purchase price of the shares was EUR 2.0 million.

In 2025, the business areas will focus on securing net sales and operating profit as well as improving the efficiency of working capital. KH Group’s change in strategy is being advanced according to plan."

Events after the review period

The Board of Directors of KH Group Plc decided to establish a performance-based share scheme for key employees of KH-Koneet. The plan replaces the performance-based matching share plan announced on 31 May 2024. The purpose of the new scheme is to align the goals of shareholders and key employees in order to increase the company's shareholder value in the long term, guide the key employees to achieve the company’s strategic objectives, engage their commitment to the company and offer them a competitive incentive scheme based on the earning and accrual of KH Group shares. The performance-based share scheme has one (1) performance period of two (2) years, corresponding to the financial periods 2025–2026. The scheme provides key employees with the opportunity to earn KH Group shares based on performance

Financial objectives and future outlook

KH Group’s objective is to become an industrial group built around the KH-Koneet business and to divest other business areas in line with the Group's strategy. At the same time, active developments will continue regarding other business areas. Exit planning and the assessment of exit opportunities for the other business areas will also continue.

During the next few years, the aim is to invest in the growth of the core business and pay dividends after significant exits within the limits established by the balance sheet structure and financing agreements.

The guidance with the current Group structure of continuing operations for 2025 is as follows: the company estimates that both the net sales (EUR 194.0 million) and the comparable operating profit (EUR 7.2 million) will remain approximately at the same level year-on-year.

KH GROUP PLC

Ville Nikulainen
CEO

FURTHER INFORMATION:
CEO Ville Nikulainen, tel. +358 400 459 343

DISTRIBUTION:
Nasdaq Helsinki Ltd
Major media
www.khgroup.com

KH Group Plc is a Nordic conglomerate operating in the business areas of KH-Koneet, Nordic Rescue Group and Indoor Group. We are a leading supplier of construction and earth-moving equipment, rescue vehicle manufacturer as well as furniture and interior decoration retailer. The objective of our strategy is to create an industrial group around the business of KH-Koneet. KH Group’s share is listed on Nasdaq Helsinki.

Attachment

• KH Group Plc - Business Review Q1_2025