Vow Q1 2025: Key Takeaways
Margin recovery in cruise, pressure in industrial – stock drops 24%
Yesterday morning’s presentation from Vow (VOW.OL) offered a closer look at a quarter that was broadly in line on top-line revenue, but weighed down by margin pressure, working capital swings, and continued weakness in Industrial Solutions. While the underlying trends in Maritime and Aftersales were positive, foreign exchange effects and non-recurring costs led to a significant bottom-line miss.
At the same time, the company has secured a 12-month extension of its loan facilities with DNB and announced revised covenant terms, providing short-term financial headroom. With new leadership now in place and operational improvement a stated focus, the call gave helpful colour on the opportunities and hurdles ahead.
Below are my key takeaways from the session.
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New leadership tone and structure
New CEO Gunnar Pedersen, only eight days into the role, led the call with clear intent to listen, assess, and prioritise execution:
“It’s a company with a solid market position in cruise... interesting opportunities, however challenging they may be. What we’re doing now is working hard to get our arms around the company.”
He was joined by CFO Cecilie Brænd Hekneby, who also recently joined. She outlined four near-term priorities:
Optimising working capital
Managing FX exposure
Reviewing capital structure
Enhancing operational performance
Segment performance and margin outlook
Revenue grew 12% YoY to NOK 261 million, with Adjusted EBITDA at NOK 13.2 million. Margins remain under pressure from legacy contracts, but the direction is improving.
Maritime Solutions:
Revenue stable YoY at NOK 108m. Adj. EBITDA margin: 12.4%.
“Margins are expected to improve... as we complete legacy contracts and start delivering on newer contracts with significantly improved margins.”
Aftersales:
Revenue up 22% to NOK 58m. Adj. EBITDA margin rose to 15.3%.
“12 more vessels are entering operations this year – and as they do, they move into our aftersales market and become recurring revenue.”
Industrial Solutions:
Revenue at NOK 94m, Adj. EBITDA just NOK 1.3m.
“Profitability is impacted by tendering, project development and holding capacity... something we will look into.”
Backlog visibility and cruise pipeline
The order backlog stands at NOK 1.53 billion, with NOK 250 million in options. A new €3.5m cruise contract was signed post-quarter.
“We have a strong backlog with contracts to deliver systems to 35 vessels, and are tendering for another 44. This gives us good visibility going forward.”
CEO Pedersen stressed that cruise remains Vow’s “home market”, with all major shipyards and cruise lines as customers.
VGM and industrial project timing
The tone on Vow Green Metals was optimistic:
“We’re quite enthusiastic... with HitecVision entering this business where Vow’s technology is so instrumental.”
However, timing of other large industrial projects remains uncertain:
“These big projects take far more time to mature than we – or the customers – expected.”
Notably, Phase 2 at Follum is not included in the current backlog.
