Inission (INISS) Q2 2024 earnings summary

Executive summary

• Q2 sales rose 1.4% to SEK 570 million, with AXXE acquisition contributing 46 MSEK; organic sales dropped 6.8%.

• EBIT for Q2 was SEK 28 million (4.9% margin), down from 40 MSEK (7.2%) last year; EBITDA was SEK 29 million, down SEK 12.6 million year-over-year; AXXE contributed SEK 4 million.

• Earnings per share were SEK 0.65, impacted by a SEK 4 million currency-related cost.

• Cost reduction programs are underway, but effects are delayed due to time lags in implementation.

• Cash flow from operations was -3.6 MSEK in Q2, negatively impacted by changes in invoice financing and working capital.

Financial highlights

• Last 12 months (LTM) net sales exceeded SEK 2.2 billion, with EBITDA of SEK 157 million (7.1% margin).

• Q2 margin was 5% (down from 7.3% last year); Q2 2024 EBITA margin: 5.0%.

• H1 2024 net sales: 1,151 MSEK (up from 1,127 MSEK); EBITA: 80.5 MSEK (down from 86.0 MSEK).

• Solid equity ratio at 37% (up from 33%); net debt (excl. leasing) at -236 MSEK.

• Cash flow from operations for H1: -23.0 MSEK (down from 61.1 MSEK); investments in Q2: 16 MSEK.

Outlook and guidance

• Management maintains a SEK 2.4 billion sales target for the year, though acknowledges it is challenging.

• EBITDA margin target of 7% is considered achievable even if sales fall short, provided cost cuts are realized.

• Book-to-bill ratio has improved since Q4 but remains below one; Q3 is critical for stabilization.

• No reliance on M&A to reach 2024 targets; focus is on organic performance, but long-term growth expected through acquisitions.

• Project to transfer Enedo's Tunis factory to Inission EMS on track for completion in Q2 2025.