DevPort (DEVP) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 4% to SEK 550.4m; operating profit was SEK 45.9m and operating margin 8.3%, above the 8% strategic target.

• Q4 revenue fell 3% to SEK 143.4m; operating margin was 9.4%, while net income and EPS declined YoY.

• Management reported steady engineering demand despite a weaker economy, and expects the downturn to weigh on growth for a few more quarters.

Financial highlights

• FY revenue SEK 550.4m vs SEK 527.6m; operating profit SEK 45.9m vs SEK 46.9m; net income SEK 35.4m vs SEK 35.9m.

• FY EPS SEK 3.51 vs SEK 3.56; Q4 EPS SEK 1.08 vs SEK 1.22, both before and after dilution.

• Q4 revenue SEK 143.4m vs SEK 148.1m; operating profit SEK 13.5m vs SEK 16.1m; net income SEK 10.9m vs SEK 12.3m.

• Operating cash flow rose to SEK 44.8m from SEK 36.9m in FY 2022; year-end cash was SEK 41.9m vs SEK 17.1m.

Outlook and guidance

• Management expects the economic downturn to constrain growth for a few more quarters, while continuing to focus on processes, margins and new markets.

• Long-term target: at least 40% of revenue from customers outside automotive; the non-traditional automotive share exceeded 25% at FY-end 2023.

• Engineering demand remains high overall; 2024 opportunities cited in defense, energy and other Swedish industries, alongside increased project-package delivery and lower-cost-country sourcing.

• Management expects interest in Digital Solutions services to increase in 2024; Production Development demand is expected to keep rising, particularly from new non-automotive customers.