TKH Group (TWEKA) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 turnover was €420.0 million, nearly flat year-over-year, with 2.2% organic growth, led by Smart Vision and Smart Connectivity, while Smart Manufacturing declined due to a strong prior-year comparison and digitalization market weakness.

• EBITA/EBITDA decreased slightly to €40.0 million from €41.2 million, with cost-saving measures and prior plant closures expected to benefit results from Q2 onward.

• Order book increased slightly to €1,137 million, supported by a robust sales funnel of over 70 projects and 11,000 km under tender through 2030.

• Dewetron divestment completed for €54 million, generating a one-off net profit of €36 million, with proceeds to be allocated based on net debt/EBITDA ratio.

• Results followed a strong Q4, with growth in all segments except Smart Connectivity, which was impacted by a weak digitalization market.

Financial highlights

• Smart Vision achieved 5.2% organic growth, with machine vision nearing 20% organic growth and order book up for the fifth consecutive quarter.

• Smart Manufacturing turnover declined 1.2% year-over-year, but return on sales remained high due to efficiency programs; order book slightly lower.

• Smart Connectivity saw 2.1% organic growth in offshore energy and a rebound in onshore turnover, but digitalization weakness and Eemshaven ramp-up costs impacted results.

• Return on sales (ROS) was 9.5%, down from 9.8% in Q1 2024; added value at 51.2% (Q1 2024: 51.8%).

• Guidance for incremental costs of EUR 6–8 million related to subsea and Lochem remains unchanged.

Outlook and guidance

• Organic growth in turnover and EBITA/EBITDA reiterated for 2025, excluding one-off items, with Smart Vision and Connectivity expected to drive growth and Smart Manufacturing to see organic decline.

• Cost-saving measures to positively impact results from Q2 onward.

• Subsea cable turnover guidance of EUR 180 million for 2025 remains achievable, though more challenging.

• Direct cost impact from recent tariff announcements assessed as limited.