Tempest Security (TSEC) Q2 2024 earnings summary

Executive summary

• Achieved record net sales of 140.7 MSEK in Q2 2024, up 20.4% year-over-year, and 261.5 MSEK for H1, up 16.5% year-over-year.

• Strong growth in Swedish guarding operations, with a 36% increase in segment sales and stable margins despite start-up costs.

• International Risk Solutions segment faced challenges, especially in the US and Denmark, leading to a strategic focus on the Swedish home market.

• Divested Turkish subsidiary and secured significant new contracts, including with Stockholm City and Nationalmuseum.

Financial highlights

• Q2 2024 EBITDA was 1.7 MSEK (4.8 MSEK in Q2 2023); adjusted EBITDA was 3.1 MSEK (5.4 MSEK), with a margin of 2.2% (4.6%).

• Operating income for Q2 was -1.4 MSEK (1.9 MSEK); adjusted operating income was 0.0 MSEK (2.4 MSEK).

• Net result for Q2 was -2.7 MSEK (1.4 MSEK); EPS was -0.27 SEK (0.10 SEK).

• Cash flow from operations before working capital changes was -0.5 MSEK (2.1 MSEK).

• H1 2024 EBITDA was 5.1 MSEK (8.3 MSEK); adjusted EBITDA was 6.5 MSEK (9.7 MSEK).

Outlook and guidance

• Management remains optimistic, focusing on the Swedish market for future growth and profitability.

• Strategic investments and new sales initiatives are expected to drive continued growth and margin improvement.