Kempower (KEMPOWR) Q2 2024 earnings summary

Executive summary

• H1 and Q2 2024 saw weak financial performance, with revenue and order intake declining sharply due to high customer inventory levels, delayed order closures, and slow grid connections compared to a record 2023 period.

• Revenue from existing large customers declined, but new customer onboarding progressed, with 32 new customers in H1 and 17 in Q2, and strong growth in North America partially offsetting declines in Europe and Nordics.

• The company is accelerating cost-saving actions, targeting €10 million in annual savings and a 10% global workforce reduction, aiming for breakeven by Q4 2024.

• Turnaround actions focus on profitability improvement, cost savings, and supporting customer charger rollouts.

• Loss for H1 2024 was €16.6 million, compared to a profit of €16.7 million in H1 2023.

Financial highlights

• Q2 2024 revenue: €57.1 million (down 21% year-over-year); H1 2024 revenue: €99.7 million (down 22%).

• Q2 2024 order intake: €54.1 million; order backlog at quarter-end: €101 million, down from €138.5 million in Q2 2023.

• Q2 2024 operative EBIT: -€8.5 million (margin -14.9%); H1 2024 operative EBIT: -€19.3 million.

• Gross profit margin in Q2 2024: 44.4% (Q2 2023: 51.1%).

• Net cash position declined by €25.1 million in Q2; net debt at Q2 end: -€30.2 million.

Outlook and guidance

• 2024 revenue guidance revised to €220–260 million (previously €360–410 million); full-year EBIT margin expected to be negative, with breakeven targeted for Q4.

• Medium-term (2026–2028) targets: €750 million revenue and 10–15% EBIT margin; long-term EBIT margin target above 15%.

• Excess customer inventory (~€100 million) expected to persist through year-end, with gradual improvement anticipated.