Kempower (KEMPOWR) Q3 2024 earnings summary

Executive summary

• Challenging market conditions persisted in Q3 2024, with high customer inventory and slow decision-making impacting sales and leading to a 28% year-over-year revenue decline to €52.3 million.

• Installation of DC charging infrastructure grew 18% in Europe and 74% in North America year-over-year, with North America revenue up 127% to €13.4 million for Jan–Sep 2024.

• Onboarded 12 new customers in Q3, totaling 44 for the year, including major OEMs and energy companies; new customer acquisition is a key focus.

• Completed ramp-up of next-generation product portfolio, removing previous production constraints and enabling full production capacity.

• Profitability improvement and cost-saving actions are underway, with strong liquidity maintained and break-even targeted for Q4 2024.

Financial highlights

• Q3 2024 revenue was €52.3 million, down 28% year-over-year; Jan–Sep 2024 revenue was €152.0 million, down 24%.

• Gross profit margin in Q3 2024 was 51.3%, a strong level for the industry.

• Operative EBIT for Q3 2024 was -€7.9 million, impacted by low revenue, high fixed costs, and a €5 million warranty provision.

• Operating cash flow was negative €9.3 million in Q3 2024, due to negative result, CapEx, and increased working capital.

• Order intake for Q3 2024 was €51.5 million; order backlog at quarter-end was €100.2 million.

Outlook and guidance

• 2024 revenue guidance narrowed to €220–230 million, down from previous €220–260 million.

• Operative EBIT margin expected to be negative for the full year, but break-even targeted for Q4 2024.

• Excess customer inventory (~€80 million) expected to remain high until H1 2025.

• Long-term targets unchanged: €750 million revenue and 10–15% EBIT margin by 2026–2028.