Secunet Security Networks (YSN) Q2 2024 earnings summary

Executive summary

• Sales revenue for H1 2024 declined 5% year-over-year to €144.3 million, with both Public and Business Sectors contributing to the decrease, but order intake and backlog rose sharply, indicating strong demand.

• EBIT dropped 64% to €1.4 million, impacted by the absence of prior year one-time income and higher R&D and administrative costs, with a significant Q2 improvement.

• Net income for H1 2024 was €1.0 million, down 59% year-over-year; EPS was €0.16.

• Cash and cash equivalents were €21.1 million as of June 30, 2024, with improved operating cash flow and higher investments.

• Incoming orders increased 15% to €169.6 million and order backlog rose 13% to €216.5 million.

Financial highlights

• Gross profit increased 19% to €28.6 million despite lower sales, as cost of sales fell 9%.

• EBIT margin for H1 2024 declined significantly compared to the previous year.

• Cash flow from operating activities improved to €3.7 million from -€3.0 million in H1 2023.

• Investments in intangible assets and property, plant, and equipment rose to €5.6 million.

• Cash outflow from financing activities was €18.3 million, reflecting dividend and lease repayments.

Outlook and guidance

• Annual forecast for 2024 is confirmed, with full-year sales revenue expected around €390 million and EBIT forecast at €42 million.

• Stable business development is expected, with a seasonal uptick anticipated in H2 and Q4 projected as the strongest quarter.

• Strategy focuses on sustainable and profitable growth, expansion in public sector, innovation in business sector, cloudification, and targeted acquisitions.

• Risks from German federal budget debates remain but are being managed through increased sales activities.