Q1 2025 - Lifco - Analysis

Regaining lost ground from Q1 2024 - off to a softer M&A start in FY25

The leading Swedish serial acquirer, Lifco AB, reported Q1 results this morning. At the time of writing, the stock’s up 4%.

Favorable Comparison and Stabilizing Market Conditions

It reported a strong 8.1% organic revenue increase, which was helped by a favorable comparison vs. Q1 last year and timing of Easter. Essentially, Lifco was able to mostly recoup lost ground from last year’s -7.8% organic revenue growth.

Additionally, exceptionally strong performance for its lower-margin Contract Manufacturing segment continued (+94.5%), although CEO Waldemarson noted a weaker start in April, which doesn’t necessarily have to paint a dire picture for Q2. If volumes were to weaken more meaningfully, it would take some months to adjust the expense structure and maintain profitability. Historically, Lifco’s been quite fast with expense control. The wild card is that the situation on tariffs is fluid, and it’s difficult to predict the impact on demand in Lifco’s major end markets. So far in April, order flow has been fairly strong.

Let’s take a closer look at the quarter, and update our valuation model.