Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vaisala Oyj (FRA:VAYA, Financial) reported a strong increase in orders received, up 26%, leading to a record-high order book.
- Net sales grew by 5% year-on-year, driven by large orders and growth in subscription sales.
- The acquisition of Speedwell Climate is expected to enhance Vaisala's subscription-based business, particularly in providing weather-related data to insurance companies.
- The company launched three new products with strategic long-term impacts, including a cloud-based monitoring product for life sciences and a weather-based decision-making platform for renewable energy.
- Vaisala Oyj (FRA:VAYA) maintains a strong financial position with a stable cash flow and continued investment in infrastructure, such as the automated logistics center.
Negative Points
- Operating margin decreased to 17.7% from the previous year, partly due to last year's extraordinary profit warning and bonus releases.
- Gross margin slightly decreased from 58% to 57.3%, attributed to product mix changes and higher project business share.
- The industrial measurement segment faces uncertainties due to global manufacturing PM indicators showing negative development.
- The carbon capture industry, while strategically important, is currently small and not expected to contribute materially in the short term.
- Fixed costs increased compared to the previous year due to timing differences, impacting overall cost management.
Q & A Highlights
Q: How comfortable are you with your market guidance given some setbacks in general industrial activity indicators?
A: We are very comfortable with the guidance. We have seen early signs of recovery in North America, although it hasn't extended to Europe or Asia yet. It's still early, but there is enough evidence to support our guidance.
Q: Can you share which customer segments contributed to the high growth in subscription-based revenue?
A: The growth was broad-based across different customer segments, with no specific segment standing out.
Q: How material do you expect sales from the new carbon capture product to be in the next few years?
A: It's important to establish ourselves in this emerging industry, which we believe will be sizable in the long term. Currently, the carbon capture industry is small, but it's forming, and our strategic positioning is crucial.
Q: Could you elaborate on the timing elements involved with the slight fall in product sales on the weather environment side?
A: There is always some timing impact in this business due to the nature of product sales and customer demand variability. This is a normal occurrence and not specific to this quarter.
Q: Can you explain the transparency wording used as a driver for service growth in industrial measurement?
A: The ERP system has provided us with a more granular view, allowing us to separate service elements from product sales. This visibility, along with install base growth and on-site calibrations, has driven service growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
