Overview
The Board is pleased with the Company’s ability to respond swiftly and decisively to external pressures, preserving profitability while remaining steadfast in executing its long-term growth strategy of introducing new products and further penetrating international markets. The Board is pleased with the overall performance in H1 2025 given the scale, persistence, and global nature of the macroeconomic challenges affecting trading.
Revenue was US$ 39.8m (H1 2024: US$51.8m), a 23% decline, with most markets and product categories contributing. The Company’s flexible cost structure enabled rapid adjustment to lower volumes, helping deliver adjusted EBITDA of US$6.4m (H1 2024: US$12.4m) with a margin of 15.9% (H1 2024: 23.8%). Pricing actions and efficiency gains partially offset unabsorbed overhead in the period, supporting a healthy gross margin of 52.8% (H1 2024: 54.6%).
Cash flow was US$ 4.1m (H1 2024: US$ 2.9m), benefiting from timing of collections and lower capital outlays, translating to a cash balance of US$ 24.6m at 30 June 2025 after paying a US$ 7.1m dividend in May. Inventory build-up was primarily attributable to new products and lower sales, but with trading expected to strengthen in H2, supported by normal seasonality and contributions from two new products, full-year inventory levels are expected to moderate.
Regional Review
North America
North American sales declined 18% to US$ 31.8m (H1 2024: US$ 38.8m), primarily driven by lower sales of Boomed and Ride-on screeds. Revenue from direct sales to new customers represented 15% of total H1 revenue in the region (2024: 23%). Customers continue to report healthy bidding and robust backlogs, however project starts, as previously reported, continue to be subdued. Despite this, underlying demand in the non-residential market remains positive, supported by long-term structural trends. Furthermore, the worsening shortage of skilled labor is increasing the need for automation and productivity improvements, which in turn continues to drive demand for our products.
Europe
Sales in Europe were US$ 3.5m (H1 2024: US$ 7.1m), a 51% decline, reflecting weaker market conditions compounded by turbulent trade relations with the US and on-going geopolitical conflicts. Revenue from direct sales to new customers represented 38% of total H1 revenue in the region (2024: 32%). Europe remains one of Somero’s key target international markets, with the Company continuing to view the region as offering significant future growth potential despite the near-term headwinds. The 2024 opening of our Belgium service center has enhanced our ability to in serve the customers in the region and to meet demand for local machine repair and servicing.
Australia
In Australia, revenue declined 34% to US$ 2.1m (H1 2024: US$ 3.2m). Revenue from direct sales to new customers represented 25% of total H1 revenue in the region (2024: 62%). The transition from a dealer model to direct sales alongside the addition of key sales and support personnel facilitated the rapid expansion of our in-country product range from 2020 onwards. There was a strong initial uptake, contributing to the exceptional growth seen in recent years. Furthermore, the territory is experiencing severe shortages of skilled tradespeople, persistent inflation and significantly tightened monetary policy to bring inflation back within its target range. While we expect the long-term growth rate in Australia to continue to normalize, there remains opportunity to further deepen market penetration in the region. We continue to focus on growing revenue in this territory by broadening awareness and educating the marketplace on Somero’s value proposition.
Rest of World
Our Rest of World region, which includes Latin America, the Middle East, India, Southeast Asia, Korea and China, reported sales of US$ 2.4m (H1 2024: US$ 2.7m), representing a 11% decline. The main contributor to H1 2025 revenues was Latin America, which reported sales of US$ 0.5m compared to US$ 1.3m in H1 2024. As previously stated, given the relatively small base of business in each region, trading will fluctuate from period to period.
Updated Strategic Framework
Against a backdrop of near-term market challenges, the Board has refreshed Somero’s long-term strategic framework to reinforce resilience today while at the same time positioning the business to capture the substantial opportunities ahead. The framework is designed to guide the Company through current conditions with focus and discipline, while sharpening execution around areas of highest impact. In the longer term, the framework is intended to drive sustainable growth and ultimately superior shareholder returns.
The framework builds on the Company’s proven model, while incorporating fresh perspectives from new leadership. It reflects Somero’s ambition to reinforce its foundations, extend its track record of innovation, and broaden its reach. Crucially, it provides a common language and shared focus across the organization, aligning resources and priorities and ensuring everyone at the Company pulls in the same direction.
The updated framework is built around three strategic pillars:
- Fortify: reinforcing Somero’s foundation through strengthening operational excellence, delivering best in class customer service and support, and continued investment in people, culture and processes.
- Innovate: driving innovation through new product developments, advancing technologies, refining processes, and discovering better ways to serve our customers. By harnessing customer insight and our industry expertise, we strive to create or acquire solutions that address evolving needs and deliver lasting value both within current markets and as we explore new opportunities.
- Amplify: expanding and scaling Somero’s reach into new customer segments, augmenting sales channels, and spreading awareness of the Company’s value proposition in existing and adjacent markets through both organic growth initiatives and strategic acquisitions.
Implementation of the framework is now underway, with the broader organization developing initiatives under each pillar. While this work is in its early stages, the framework ensures the organization and its resources are aligned and directed toward the areas with the greatest impact on growth and value creation. As the program progresses, the Board expects to refine priorities and, in time, providing further updates in due course.
New product launches
The Company continues to advance a robust pipeline of innovations designed to open new markets, strengthen its competitive position, and meet changing customer needs. Investment in R&D is a core strategic priority, ensuring Somero is well positioned to capture long-term growth opportunities as the construction industry evolves.
In January, the Company launched the SRS-4e, an electric version of the popular SRS-4 Boomed screed, continuing its electrification journey. Customer feedback has been positive, particularly in Europe where demand for sustainable solutions is more advanced. Electrification remains an important part of our long-term agenda, with our approach guided by customer demand. While uptake is still at an early stage in our industry, we continue to invest selectively to ensure we are well positioned as adoption develops.
Looking ahead to H2, the Hammerhead by Somero will broaden our reach into the mid-range concrete contractor segment with a solution designed for quality, ease of use and affordability. This segment is significantly larger than the Company’s traditional commercial customer base and has different needs necessitating a tailored offering.
The third new machine set to launch in H2 is the S-15EZ, the next generation successor to the S-15R mid-sized Boomed screed. Incorporating the latest technologies and features, the S-15EZ offers enhanced maneuverability, quality, and productivity, making it well suited to today’s market where pour sizes have been trending down.
Alongside the development of new machines, the Company is also committed to improving current and future products through new technologies and enhancing the overall customer experience. In January, the Company launched a virtual reality simulation training program for the S-22EZ, complete with mobile phone app, giving customers the ability to train anytime, anywhere. This cutting-edge tool reduces costs, improves efficiency, and demonstrates our commitment to using technology to deliver lasting value beyond the machine itself.
Beyond these launches, our product pipeline remains active and forward-looking. We are advancing R&D to deliver new machines that address customer pain points and enhance productivity, introducing technologies to strengthen both current and future products, and exploring opportunities in adjacent markets. Several initiatives are already underway that have the potential to open further growth avenues. While details will be shared in due course, our commitment to innovation ensures that Somero remains well positioned to anticipate customer needs and capture future demand.
In H1 2025, the Company repurchased a total of 256,734 shares under the Company’s ongoing buyback program put in place to offset dilution from equity award schemes. Shares were acquired in line with previously announced program parameters. The Company will make further announcements to the market as and when further repurchases are made.
Our People
On behalf of the Board, we would like to thank all our employees worldwide for their continued commitment and contribution. The adaptability and dedication of the Somero team remain a core strength, enabling the Company to respond effectively to changing conditions while consistently delivering high-quality products and service to customers. This agility underpins our flexible cost model and supports sustained profitability. The Board and management remain committed to providing a rewarding and challenging environment with opportunities for all employees to grow and succeed.
Outlook
Demand for US non-residential construction remains resilient, supported by positive long-term trends across key end-markets. Global uncertainty – linked to factors including tariffs, persistently high interest rates and restrictive immigration policies – continues to weigh on the pace of projects, however customers report strong levels of bidding activity and healthy backlogs which are expected to extend through year-end.
The Board expects trading to improve in H2 compared with H1, supported by normal seasonality and contributions from new products.
We continue to anticipate full year 2025 revenues of c. US$ 90.0m, adjusted EBITDA of c. US$ 18.0m, and year-end net cash of c. US$ 24.0m.
Bob Scheuer
Non-Executive Chairman
Tim Averkamp
Chief Executive Officer
9 September 2025
