Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zaptec ASA (STU:6I4, Financial) has maintained a strong gross margin of 39% despite a challenging market environment.
- The company is capturing market share, particularly in key markets such as Sweden, Norway, Switzerland, Denmark, and the Netherlands.
- Zaptec ASA (STU:6I4) has successfully reduced its inventory by 70 million NOK, which is expected to improve liquidity moving forward.
- The company is well-positioned for 2025 with the release of new products in the first quarter, which are expected to have stronger gross margins.
- There is a positive outlook for market recovery in 2025, driven by stricter EU CO2 emission requirements and more affordable EV models entering the market.
Negative Points
- Revenue for the third quarter was down by 26% compared to the same period last year, reflecting a weak market.
- Order intake was soft at 244 million NOK, indicating continued market challenges.
- The European plugin vehicle sales saw a significant drop, with an 18% reduction in the EU and a 12% decline in prioritized markets.
- There was no growth in core markets such as the Nordics and Switzerland during the third quarter.
- The company is comparing current performance against unusually high revenue quarters from the previous year, which may skew perceptions of current performance.
Q & A Highlights
Q: Can you elaborate on the revenue decline in the third quarter and how it compares to last year?
A: The revenue for the third quarter was down by 26% compared to the same period last year. This decline is attributed to a challenging market environment. However, it's important to note that last year's third and fourth quarters were unusually high due to changes in competition. Despite the revenue drop, we are gaining market share, particularly in Sweden, which accounted for 29% of sales. (CEO)
Q: How is Zaptec managing its inventory levels in the current market conditions?
A: We have successfully reduced our inventory by 70 million NOK in the last quarter, thanks to lower production levels. We are confident that we will normalize inventory levels during 2025, which will also improve our liquidity. (CEO)
Q: What are the expectations for market recovery and future sales?
A: We expect the market to recover during 2025, driven by stricter EU CO2 emission requirements and the introduction of more affordable EV models. Additionally, a Goldman Sachs report predicts a 50% drop in battery prices from 2023 to 2026, which should further boost EV sales. (CEO)
Q: Can you provide insights into the company's gross margin performance?
A: We achieved a gross margin of 39% for the third quarter, continuing a positive trend. We are closely monitoring our supply chain and incorporating cost focus into product development to maintain low costs in future releases. (Finance Director)
Q: What are the strategic plans for new product releases and market expansion?
A: We are set to release new products with stronger gross margins in the first quarter of next year. These products will give us access to new markets and improve sales in existing ones. We are also targeting Germany, the largest EU market, with our new SAEC Pro Ireit product. (CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
