Serstech (SERT) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were KSEK 21,369, down from KSEK 32,775 in Q2 2023, with profitability maintained in both Q2 and H1 2024.

• Revenue diversification improved, with more customers and countries, and an increase in repetitive orders.

• Two significant Q2 orders: one from Proengin Inc (KSEK 5,600) and one from the US military, the latter evaluating the new Serstech Arx mkII.

• Production ramp-up ongoing for Serstech Arx mkII, with a backlog expected to be cleared by August.

• No current component shortages, but inventory is being built up as a precaution against geopolitical risks.

Financial highlights

• Q2 2024 net sales: KSEK 21,369 (Q2 2023: KSEK 32,775); H1 2024: KSEK 35,543 (H1 2023: KSEK 45,111).

• Q2 2024 EBITDA: KSEK 5,595 (margin 26%); EBIT: KSEK 3,715 (margin 17%); EPS: SEK 0.02.

• H1 2024 EBITDA: KSEK 6,963 (margin 20%); EBIT: KSEK 3,194 (margin 9%); EPS: SEK 0.01.

• Q2 2024 cash flow from operating activities: KSEK -1,112 (Q2 2023: KSEK -8,191); H1 2024: KSEK 515 (H1 2023: KSEK -9,762).

• As of June 30, 2024, cash and bank balances were KSEK 12,476, with an equity ratio of 81%.

Outlook and guidance

• Strong demand expected to continue in main segments, with no signs of a downward trend.

• Anticipates large quarter-to-quarter variations due to tender-driven business.

• Optimistic about long-term growth targets, with potential for increased demand if geopolitical uncertainty rises.