Q3 2024 Ependion AB Earnings Call Transcript
Key Points
- Ependion AB (FRA:TW4) reported a significant improvement in gross margins, particularly in the Westermo segment, due to normalized cost levels and adjusted labor costs.
- The company maintained a stable EBIT percentage sequentially, despite a drop in sales volumes, indicating effective cost control.
- The establishment of operations in India is progressing as planned, with positive customer feedback and expected full operational status by the end of the year.
- The launch of the new X3 family in Beijer Electronics is on track, with the first product set to be released in November, enhancing competitiveness.
- Ependion AB (FRA:TW4) achieved a positive free cash flow of SEK56 million for the quarter, showing improvement over the previous year.
- The company continues to face a challenging demand environment, with weak order bookings and sales across key segments.
- There was a significant sales drop compared to the previous year, attributed to a lower order book in the train segment of Westermo.
- The order intake and sales levels were negatively impacted by the phaseout of the Display Solutions product group in Beijer Electronics.
- Ependion AB (FRA:TW4) experienced a negative FX impact on EBIT, amounting to minus SEK14 million, primarily due to transactional variances.
- The external market situation remains weak and uncertain, with geopolitical and economic factors contributing to a cautious outlook for the rest of 2024.
Thank you very much. Welcome, everybody, to this quarter three presentation. As usual, we have Joakim Lauren; and myself, Jenny Sjoedahl, sitting here in Malmo for this call today. The agenda is the usual one. I will start with the general business update, then Joakim will dig deeper into our financial performance. And then I will give some concluding notes and outlook. And then after that, we open up for Q&A.
So summarizing quarter three of 2024. We can see that the challenging demand situation that we have been seeing now for quite some time remains. We see a relatively weak demand still in the marketplace in basically all our key segments, which is affecting our order bookings and sales.
So the trick now really that we have been focusing a lot on is really to balance the forward-looking activities that we are doing, such as our investments in the India market for Westermo with short-term cost reductions to balance the lower sales volumes.
When we look at the order intake, we see similar order levels as
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