Release Date: July 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ependion AB (FRA:TW4, Financial) maintained its market share despite weaker market demand.
- The company doubled its free cash flow compared to last year, driven by reduced accounts receivables and inventory reductions.
- Ependion AB (FRA:TW4) made a strategic minority investment in Blu Wireless, aiming to leverage millimeter-wave technology for high-speed train connectivity.
- The company is continuing with selective forward-looking investments, including the establishment of Westermo India.
- High activity in product development, with several new product launches planned, including the new generation of HMIs (X3 family) and the WebIQ software platform.
Negative Points
- Both business entities faced lower order bookings compared to the same quarter last year.
- Westermo's sales and profitability were negatively impacted by lower volumes.
- Beijer Electronics experienced a drop in gross margin due to the unfavorable mix related to display solutions.
- The overall order intake was down 31% compared to the boosted quarter of last year.
- The company anticipates continued challenging market conditions and a weaker order book for the coming quarter.
Q & A Highlights
Q: Has demand gotten worse since Q1, or has it been stable at a lower level?
A: It has been stable at a relatively low level. (Jenny Sjoedahl, CEO)
Q: Which parts of the energy segment are falling, and is it temporary?
A: The energy segment is relatively stable for Westermo but has seen a bit of a weakening trend for Beijer Electronics. (Jenny Sjoedahl, CEO)
Q: Can you clarify if the weak order book for Q3 is about demand or order intake?
A: It refers to the order intake and the demand from our customers. (Jenny Sjoedahl, CEO)
Q: Will the mix impact seen in Beijer Electronics in Q2 remain in the second half of the year?
A: There will still be some deliveries in the second half, but not to the extent seen in Q2. (Joakim Lauren, CFO)
Q: Will you invest more in Blu Wireless technology as it develops?
A: We will follow the technology closely and see what the next steps will be. Blu Wireless is in a unique position currently. (Jenny Sjoedahl, CEO)
Q: Can you expand on the slight rebound in Asia and the weaker market in Germany for Beijer Electronics?
A: We have seen slightly positive signals from China, while the German market is weaker due to the general industrial climate. (Jenny Sjoedahl, CEO)
Q: Is the activity level still normal across the product portfolio for Westermo?
A: Yes, the activity level is normal, but customers are taking longer to make decisions. (Jenny Sjoedahl, CEO)
Q: What kind of cost measures have been conducted in Beijer Electronics and Westermo?
A: We have a general cost cautiousness, structural changes, and are actively looking at the use of external resources. (Joakim Lauren, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
