Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cavotec SA (OSTO:CCC, Financial) reported a positive EBIT for the sixth consecutive quarter, with the EBIT margin more than doubling from the previous year.
- The company saw an 11% increase in order intake, driven by strong demand in ports and maritime sectors.
- Cavotec SA (OSTO:CCC) achieved a positive net profit for the fourth consecutive quarter, reflecting successful strategic priorities and change programs.
- The company reported a significant improvement in operating cash flow, from a loss of EUR4.6 million last year to a positive EUR5 million this quarter.
- Cavotec SA (OSTO:CCC) inaugurated a new facility in Chennai, India, enhancing production capacity and serving as a supply hub for global operations.
Negative Points
- Revenue dropped by 7% compared to the same quarter last year, reflecting the project-driven nature of the business.
- The industry division's performance remains unsatisfactory, with ongoing efforts needed to implement change programs and improve profitability.
- A cyber incident in the quarter impacted the operating result by EUR0.6 million, although it is now controlled and closed.
- The order backlog decreased, which was an active decision to focus on profitability rather than volume.
- The company is still in the early stages of assessing the potential move of its registered office from Switzerland to Sweden, which could incur costs.
Q & A Highlights
Q: Could you specify the costs associated with the cybersecurity incident and whether it will affect future deliveries?
A: Joakim Wahlquist, CFO, explained that the costs, totaling EUR0.6 million, were split between incident response, betterment costs, and business interruption. The incident delayed some deliveries, which are expected to be completed in the third quarter.
Q: When do you expect the change initiatives in the industry segment to start showing results?
A: David Pagels, CEO, noted that momentum is building within the industry division, with a focus on order intake and efficiency. While improvements are expected within two to three quarters, the groundwork is being laid now.
Q: What are the advantages and disadvantages of moving the registered office from Switzerland to Sweden?
A: David Pagels, CEO, stated that the move would align with the majority of investors and the company's listing in Sweden, reducing the complexity of complying with dual regulations. The company will maintain an office in Switzerland.
Q: Will there be a need to increase the number of employees in sales and marketing?
A: David Pagels, CEO, mentioned that while there won't be a dramatic increase in employees, the focus will be on using existing resources more efficiently and ensuring the right people are in place to support customer needs and capture aftermarket opportunities.
Q: What impact will the new factory in India have on Cavotec?
A: David Pagels, CEO, emphasized that the India facility will serve the booming domestic market, act as a sourcing hub, and support global operations. The facility will grow in line with customer demand, without requiring a large initial investment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
