Boreo (BOREO) Q3 2024 earnings summary

Executive summary

• Q3 2024 was marked by a 31% year-over-year sales decline to EUR 28.4–29 million, with operational EBIT down to EUR 1.8 million, reflecting challenging market conditions, especially in Finland and investment-driven segments.

• Cost-saving measures exceeded targets, delivering over EUR 2 million in annualized savings, supporting profitability.

• Order books improved from Q2 and rebounded to Q1 2024 levels, though some major deliveries and related earnings are postponed to 2025.

• Strategic focus shifted from acquisitions to optimizing the existing portfolio, cost control, and deleveraging.

• Operational cash flow for Q3 was EUR 0.7 million, with leverage at 3.3x.

Financial highlights

• Q3 2024 net sales were EUR 28.4 million (down 31% YoY); operational EBIT was EUR 1.8 million (down 40% YoY); EBIT margin held at 6.2% due to higher gross margins and cost reductions.

• Gross margin improved to 32% from 27% year-over-year, supported by sales mix and pricing actions.

• Operational EPS for Q3 was EUR 0.10; operational net cash flow per share was EUR 0.25.

• Return on equity on a rolling basis at Q3 was 7.8%, with ROCE at 7.9%, both reflecting profit decline.

• Inventory reduced by EUR 10 million since summer 2023; working capital at EUR 28.5 million.

Outlook and guidance

• Order books are stronger, supporting expectations for sales to operate above EUR 30 million in coming quarters, though some earnings improvements are delayed to 2025 due to postponed deliveries.

• No separate short-term financial guidance; long-term targets remain: minimum 15% average annual operational EBIT growth, minimum 15% ROCE, and net debt to operational EBITDA between 2 and 3.

• Electronics and defense segments expected to drive Q4 performance due to seasonal and defense demand.

• Cost actions and improved margins provide confidence in profit generation even at moderate sales levels.