PowerCell (PCELL) Q2 2024 earnings summary

Executive summary

• Achieved 6% net sales growth in Q2 2024 and 17% growth on a rolling 12-month basis, with record sales and ramp-up for serial deliveries, mainly driven by marine segment expansion.

• Launched Marine System 225, an upgraded product with a 12.5% improved power rating, securing breakthrough orders from a leading European OEM and O.S. Energy.

• Converted a government loan into a SEK 30m grant, recognized as other operating income and highlighted as a non-recurring item.

• Transitioning from short-term project sales to long-term OEM-driven sales, resulting in longer sales cycles but building a more stable business pipeline.

• Focused on OEM customer orders, US expansion, and scaling product generation toward breakeven.

Financial highlights

• Q2 2024 net sales increased 6% to SEK 66.3m; rolling 12 months net sales up 17% to SEK 315.8m.

• Gross profit for Q2 was SEK 11.0m, with a gross margin of 16.6%, impacted by an SEK 8m inventory reevaluation; YTD gross margin 30.0%, R12M 37.6%.

• Royalty income from Bosch increased to SEK 23m on a rolling 12-month basis, contributing 100% to gross margin.

• Q2 cash flow was -SEK 50.6m, with year-to-date cash flow at -SEK 11.9m, reflecting timing of customer payments and EU project activity.

• SEK 10.4m capitalized as intangible assets for product development in Q2.

Outlook and guidance

• Continued focus on expanding OEM customer base, US market growth, and scaling production to achieve breakeven and balanced cash flow.

• Ongoing development and industrialization of next-generation heavy-duty and medium-duty fuel cell platforms.

• Macroeconomic uncertainty and customer investment timing may impact short-term growth, but long-term prospects are positive.

• Confident in ability to scale production and reach breakeven with an asset-light industrial footprint.