PowerCell (PCELL) Q3 2024 earnings summary

Executive summary

• Net sales grew 3% in Q3 2024 and 12% on a rolling twelve-month basis, with strong market activity and major orders, especially in the marine segment.

• Serial production commenced, highlighted by a SEK 165m order from an Italian marine OEM, and approval in principle for a methanol reformer and fuel cell system.

• Negotiation-to-delivery cycles shortened from five years to 18 months, indicating market maturity and faster revenue realization.

• Entered a SEK 7m concept study agreement for hydrogen-electric VTOL aircraft with an Australian aviation company.

• Growth is driven by both follow-up orders from existing customers and new customer acquisitions across all segments.

Financial highlights

• Q3 2024 net sales were SEK 71.9m (+3% YoY); rolling 12 months net sales at SEK 317.8m (+11.7%).

• Q3 gross profit was SEK 23.1m, with a gross margin of 32.1%; rolling 12 months gross margin at 33.3%.

• Q3 operating cash flow was SEK -7.4m, a significant improvement from SEK -51.9m in Q3 2023.

• Operating income before items affecting comparability was SEK -15.7m in Q3; after a SEK 30m government grant, YTD operating loss improved to SEK -54.4m.

• Q3 operating expenses were SEK -44.7m; OPEX/net sales R12M at 63%, showing improved operating leverage.

Outlook and guidance

• High activity expected in Q4, driven by major marine projects in Norway and Italy, with revenue from the SEK 165m Italian order recognized in Q4 and deliveries in 2025.

• Strategic focus on OEM customer orders, US expansion, scaling product generation, and accelerating industrialization of next-gen platforms.

• Structured for break-even in a low-volume market, with investments in product offering, internal capabilities, and industrial stability.

• Management anticipates long-term profitable growth, supported by commercial contracts and growing demand for hydrogen-electric solutions.

• No specific gross margin or profitability forecasts provided, but maintaining a strong margin remains a top priority.