Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net sales increased by 36% compared to the same quarter last year.
- Achieved the highest EBITDA amount in a single quarter with SEK24.5 million, a 129% increase from last year.
- Positive operational cash flow and net income for the quarter of SEK17 million.
- Strong performance in the APAC region with net sales of almost SEK26 million, a 274% increase versus Q2 2023.
- Positive feedback from industry participation in significant congresses, reinforcing market leadership.
Negative Points
- Order intake for the quarter decreased by 8% compared to last year's quarter.
- Order book decreased by 9% compared to the end of Q2 last year.
- Americas and EMEA regions are still slightly behind in performance.
- Increased costs, with other external costs rising by SEK4 million compared to the second quarter last year.
- Personnel costs amounted to SEK41.9 million, with additional costs for consultants filling vacant positions.
Q & A Highlights
Q: A lot of people expected you to bounce back after the soft first quarter. Can you elaborate on what exactly drove the very strong sales this quarter? Was it just coincidental in terms of you happen to deliver orders during the quarter?
A: No, it was not coincidental. We put a good structure in place and had a clear ambition to reach SEK100 million in net sales for the quarter. It was a combination of execution and some lag in delays from Q1 and even from Q4. But primarily, it was our ability to execute.
Q: Given the strong Q2, should we interpret this as the first half being approximately in line with the historical pattern and the second half being even stronger?
A: I would assume that we would have a more normal seasonality this year, perhaps a slightly stronger second half than the first half. However, we are not providing any forward guidance for the second half.
Q: Do you still expect or hope that you can reach your annual target of 20% to 30% annual top line growth this year?
A: Definitely, it is my absolute ambition to maintain and reach our financial targets. We have improved our position from March, and we are not providing any forward guidance for the second half.
Q: Could you elaborate on how the situations in different geographies have evolved since Q1 and what you expect recent trends to persist in the near to medium term?
A: Generally, the business climate is good in all three regions. We see positive developments in China, India, and Japan. In Europe and the US, we have some promising discussions that have delayed some business in the second quarter, but we expect that to open up in the third and fourth quarters.
Q: Can you elaborate on the rather large working capital build and was it just a result of you growing considerably this quarter?
A: Yes, mostly. The accounts receivables for the second quarter are an effect of the high sales for the quarter. At the end of the year, we had receivables almost at the level of what we have today due to some customers paying late.
Q: Can you elaborate on which investments have led to the increase in CapEx?
A: Our CapEx is mainly related to the work that we're doing on our platforms and building our products. This varies over the year depending on how much time we have for development.
Q: Can you give any indication on when you expect recent business development initiatives to materialize in reported figures?
A: We are getting to a first release for one of the products in our neurovascular portfolio. We are doing a soft release this week in the US. On the business development side, we are focusing on strategic accounts, and while it's hard to say exactly when it will deliver financial results, we expect positive benefits later this quarter.
Q: Can we assume that all the costs for the recent hires are reflected in the current quarterly figures? Or do you expect personnel costs or other external costs to increase further?
A: The employee costs will increase as we recruit for positions currently held by consultants. We have started recruiting slowly this year and will continue during the second half, but not at a high pace.
Q: Has there been any change in the M&A market since the beginning of this year?
A: The climate has changed for the better. The ability to raise capital in the market has improved. However, many of our targets are smaller and privately held, so the key value is somewhat isolated from the market. We see the future moving in the right direction, but no significant change right now.
Q: Everything goes according to plan, order intake will have an uptick in the second half of the year?
A: Yes, that's what we assume.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
