Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stable order intake at EUR88.5 million, only slightly below last year's EUR89.3 million.
- Sales grew year-on-year by 16.4% to EUR89.3 million.
- EBITDA increased by 26% to EUR10.9 million, resulting in a margin of 12.2%.
- Net profit nearly doubled from EUR1.9 million to EUR3.7 million, with earnings per share also doubling to EUR0.57.
- Strong regional growth, particularly in the Central region (18.4%) and Americas (45%).
Negative Points
- Negative free cash flow of minus EUR2.7 million due to further buildup of working capital.
- Increase in personnel costs driven by staff expansion and wage increases, with more wage increases expected in the coming year.
- Other operating expenses increased, mainly due to one-time expenses for the EXcelerate project.
- Financial results worsened from minus EUR0.8 million to minus EUR1.9 million, mainly due to the discontinuation of the Russian business.
- Net debt level at EUR48 million, which the company aims to reduce in the second half of the year.
Q & A Highlights
Q: How much of the 16.4% revenue increase is driven by price increases versus volume?
A: Mathias Hallmann, CEO: Approximately 70% of the increase is driven by volume, with the remainder influenced by mix rather than direct price increases.
Q: Are there plans for further price increases this year?
A: Mathias Hallmann, CEO: We do not plan to implement price increases during the year, but we will introduce another price increase by the end of the year, to be communicated in Q4.
Q: What was the order intake for power plants from the US, UK, and France in Q2?
A: Mathias Hallmann, CEO: The order intake for these power plants was around EUR3 million.
Q: When do you expect more significant orders from the power plant segment?
A: Mathias Hallmann, CEO: We expect one major plant order to be released in the next few months, but most significant orders from this segment will likely come next year.
Q: Is the strong order intake in Q1 and Q2 sustainable throughout the year?
A: Mathias Hallmann, CEO: We see a good pipeline for Q3, with more projects and increased lighting orders expected as winter approaches. However, there may be some fluctuation due to larger volumes and weaker day-to-day business.
Q: What is your outlook on the chemical industry given the muted production numbers in the first half of 2024?
A: Mathias Hallmann, CEO: We see some recovery but do not expect it to return to previous levels. The chemical industry is implementing significant cost-saving programs.
Q: What are the main drivers behind the increase in personnel costs and other operating expenses?
A: Mathias Hallmann, CEO: Personnel costs are driven by staff expansion and wage increases, with approximately 70% due to wage increases. Other operating expenses are mainly due to one-time costs for the EXcelerate project, which should decrease in Q3 and Q4.
Q: How do you plan to address the negative free cash flow reported this quarter?
A: Mathias Hallmann, CEO: The negative free cash flow is due to the buildup of working capital. We expect this to be the last quarter with negative free cash flow, as we have seen improvements in June and July.
Q: What is your guidance for the rest of the year?
A: Mathias Hallmann, CEO: We expect sales to be at the upper end of our forecast range of EUR335 million to EUR350 million. EBITDA will remain in the range of EUR35 million to EUR45 million, and we anticipate an improvement in free cash flow and equity ratio by year-end.
Q: What are your strategic priorities moving forward?
A: Mathias Hallmann, CEO: Our focus will be on improving efficiency to counteract inflationary effects on profitability. We will continue to drive our growth strategy and aim to achieve our targets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
