Sdiptech (SDIP) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 reached SEK 1,392 million, up 19% year-over-year, with 9% organic growth excluding currency effects.

• Adjusted EBITA increased by 13% to SEK 260 million, with 1% organic growth and a margin of 18.7%.

• Cash flow from operations was SEK 197 million in Q2, with an 83% cash conversion rate.

• Margin slightly lower than last year at 18.7%, attributed to sales mix and restructuring costs.

• Acquisitions of WaterTech of Sweden AB and JR Industries Ltd completed; Frigotech AB divested to focus on core product-based businesses.

Financial highlights

• Quarterly revenue was approximately SEK 1.4 billion; rolling 12-month revenue at SEK 5.3 billion.

• Adjusted EBITA margin for Q2 was 18.7% (down from 19.7% last year); 18.8% year-to-date.

• Profit after tax for Q2 was SEK 118 million, with EPS after dilution at SEK 2.95.

• Net debt/Adjusted EBITDA improved to 2.05x from 2.35x year-over-year.

• Free cash flow per share (LTM) rose to 12.12, surpassing earnings per share of 11.34.

Outlook and guidance

• Demand remains solid in core infrastructure sectors, with resilience to economic cycles.

• Q3 expected to be seasonally softer due to vacation period and strong prior-year comparables.

• Acquisition strategy remains focused on quality over quantity, with a robust pipeline and moderate increase in pace.

• Aim to turn the elevator business profitable by year-end following restructuring.

• No significant pushback on pricing; price increases continue where appropriate.