engcon (ENGCON) Q3 2024 earnings summary

Executive summary

• Achieved strong EBIT margin of 22% (up from 14.1% year-over-year), driven by high gross margin and lower selling costs, supported by a scalable business model.

• Net sales rose to SEK 412 million, up 8% organically year-over-year, with order intake also up 8%, despite negative currency effects.

• Europe remains the primary growth engine, with organic order growth of 39% and net sales growth of 42% in the region.

• Awarded the Carnegie Sustainability Award 2024 for Best Newcomer, highlighting sustainability as a core driver.

• Americas and Nordics saw declines due to high interest rates and economic uncertainty, while Asia-Oceania experienced low volume and volatility.

Financial highlights

• Gross margin reached 46.1% (up from 40.2% year-over-year), attributed to favorable market and product mix.

• EBIT increased 65% to SEK 91 million, with EBIT margin at 22.0%, exceeding the 20% target.

• Cash flow from operating activities increased to SEK 144 million in Q3.

• Return on capital employed at 31% for the quarter.

• Unutilized total liquidity at the end of September was SEK 417 million.

Outlook and guidance

• Stable development and continued growth expected in the short term, with insignificant pre-purchase effects in Q4 due to marginal price increases.

• Recovery in the Nordics anticipated at the end of Q1 2025, aligned with the start of the digging season.

• Price increases for 2025 expected to be minor, roughly in line with inflation.

• Continued focus on educating the market and leveraging sustainability as a growth driver.