Guideline Geo (GGEO) Q2 2024 earnings summary

Executive summary

• Q2 2024 showed a strong recovery from a weak Q1, with net sales up 21% year-over-year to 51.7 MSEK and all regions contributing to growth.

• Order intake increased 10% year-over-year to 50.2 MSEK, including a significant 8 MSEK order from Tanzania's Ministry of Water delivered and invoiced in Q2.

• Water sector and ABEM brand, especially the Terrameter LS2, drove growth, while MALÅ saw mixed results due to weak construction markets but strong sales of the new MIRA Compact.

• Innovation continued with new product launches, participation in EU-funded projects, and an 11 MSEK grant for the GeoHEAT geothermal project.

• All regions (Americas +26%, APAC +24%, EMEA +14%) contributed to sales growth.

Financial highlights

• Net sales rose 21% year-over-year in Q2 to 51.7 MSEK.

• EBITDA improved to 6.3 MSEK (12% margin), up from 4.6 MSEK (10.7% margin) last year.

• EBIT was 2.3 MSEK (4.5% margin), up from 2.1 MSEK last year.

• Net cash flow was negative at -12.3 MSEK, impacted by higher inventory, investments, and seasonal effects.

• Equity ratio at 72.1% as of June 30, 2024.

Outlook and guidance

• No immediate liquidity concerns, with 11.6 MSEK net cash and 13 MSEK unused credit facility.

• Water segment expected to continue driving growth, while construction and infrastructure markets remain uncertain.

• Improved sales forecasting and inventory management measures are being implemented to address cash flow volatility.

• Seasonal cash flow impact expected to normalize in Q3.