QleanAir (QAIR) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were SEK 115 million, down 14–15% year-over-year, mainly due to fewer contract renewals in Japan and a weaker yen.

• Recurring revenues remained robust at SEK 74 million for the quarter and SEK 304 million on a rolling 12-month basis, accounting for about 65% of total revenues.

• EBIT dropped to SEK 1.4–1.6 million (1.4% margin), down sharply from last year, with EPS at -0.04 SEK.

• Cash flow from operations remained strong at SEK 19 million, supported by favorable working capital changes.

• APAC sales declined significantly, EMEA remained stable with strong growth in France, and Americas faced longer sales cycles and a delayed key order.

Financial highlights

• Revenue declined 14–15% year-over-year, with currency effects and fewer Japanese renewals as main drivers.

• Gross margin dropped to 63% from 68%, with gross profit SEK 20 million lower year-over-year.

• EBIT margin fell to 1.4% from 15.6% last year; EPS at -0.04 SEK versus 1.18 SEK last year.

• Net debt/equity ratio improved to 0.8; equity ratio at 32% up from 29% last year.

• Dividend of SEK 8.9 million paid in May.

Outlook and guidance

• 2024 is expected to be the trough year for Japanese contract renewals, with no significant loss of renewal rates.

• Cost-saving initiatives and focus on sales efficiency, customer focus, and cost control are underway.

• Financial targets remain: 10% organic growth and 15–20% EBIT margin in the medium to long term.

• Dividend policy is to distribute 30–50% of net profit, considering long-term development and investment needs.

• New product launches and market expansion in France, Sweden, and Germany are expected to support growth in H2 2024.