Vow (VOW) H1 2024 earnings summary

Executive summary

• Achieved significant operational turnaround with improved efficiency and margins across all divisions, supported by a robust order backlog and expanding client partnerships.

• Positioned for growth through investments in technology, acquisitions, and market expansion, with record-high demand from new large-scale projects in Norway and the US.

• Concrete actions taken to strengthen the balance sheet, including new bank agreements, cost reductions, and exploration of equity issues.

• Two major scale-up projects underway, demonstrating capability to deliver on growth and scalability.

• Substantial investments of nearly NOK 950 million over five years have positioned the company for future growth in sustainable solutions.

Financial highlights

• Revenue for 1H 2024 increased by 8.1% year-over-year to NOK 485 million, driven by growth in Aftersales (+17.6%) and Industrials (+10.9%).

• Gross margin improved to 30.9% from 25.3% in FY 2023; EBITDA before non-recurring items was NOK 26.1 million (5.4% margin).

• Operating expenses decreased by NOK 20 million year-over-year, with annual savings of NOK 40–50 million targeted for 2024.

• Result before tax for 1H 2024 was a loss of NOK 37.6 million, mainly due to higher financial costs and restructuring expenses.

• Operating cash flow was NOK 69.4 million, with available liquidity of NOK 77 million at end of June.

Outlook and guidance

• Order backlog remains strong, with increasing revenues and improving margins expected across all business segments.

• Larger contracts with improved terms are anticipated, supporting a positive financial outlook.

• CapEx is expected to remain lower than historical levels as major investment programs conclude.

• Cost optimization and new contracts are expected to help achieve a 15% EBITDA margin target going forward.

• 2024 is considered a transition year, with further restructuring and equity strengthening planned.