Garo (GARO) investor relations material

Executive summary

• Net sales for Q1 2026 were SEK 246.2 million, a 7% decline year-over-year, with adjusted EBIT at SEK -13.3 million and net income at SEK -16.9 million.

• Electrification remains the core business and financial backbone, with stable sales and a SEK 50 million contract win in Sweden.

• E-mobility sales declined 26% year-over-year, with profitability impacted by lower sales and gross margin.

• Strategic restructuring includes production relocation from Poland to Sweden, closure of the German sales office, and consolidation of Swedish subsidiaries, targeting significant annual cost savings.

• Leadership transition underway, with Joe Ree as Interim CEO and Tobias Byfeldt to assume the CEO role in June.

Financial highlights

• Net sales were SEK 246.2 million, down 7% year-over-year, mainly due to economic conditions and a cold spring.

• Adjusted EBIT was SEK -13.3 million, compared to SEK 0.4 million in Q1 2025.

• Gross margin declined due to product mix, campaigns, and currency effects.

• Cash flow from operating activities after working capital changes was SEK -7.5 million.

• Net debt stood at SEK 255.2 million, with an equity asset ratio of 50.6%.

Outlook and guidance

• Structural changes are expected to yield annual cost savings of over SEK 50 million.

• Electrification sales expected to increase, supported by Temporary Power trends and project wins.

• E-mobility market in Sweden and Europe remains positive, with strategic actions aimed at recovery and long-term growth.

• Anticipated recovery in Swedish residential construction in 2026 to support sales.

• Short-term market outlook is cautious due to delayed investment decisions and economic uncertainty.