Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- C-Rad AB (FRA:24C, Financial) maintains a strong financial stability with a solid profitability despite challenges in the EMEA region.
- The company has a comprehensive interoperability portfolio interfacing with major LINAC, Proton, and CT vendors, enhancing its market position.
- C-Rad AB is expanding its global presence, particularly in less mature Southeast Asian markets and Latin America, which strengthens its resilience.
- The APAC region showed strong performance with an 11% increase in order intake and a 43% increase in revenue.
- C-Rad AB has a healthy EBIT margin of 17% and a strong balance sheet with no long-term debt, allowing for future growth investments.
Negative Points
- Order intake for the third quarter declined by 40% from the previous year, falling below expectations.
- Revenue decreased by 10% compared to the same quarter last year, primarily due to lower order intake and backlog conversion timing.
- The EMEA region experienced a significant 77% decrease in order intake, impacted by macroeconomic slowdown and slower decision-making.
- Cash flow was negatively affected by increased receivables related to Proton orders, leading to a decrease in cash at quarter end.
- Concerns were raised about investor confidence following a private presentation that allegedly led to a stock price drop.
Q & A Highlights
Q: How should we think about the gross margin in Q4 given the high levels due to Proton orders in the last two quarters? Do you have any orders left to deliver in the fourth quarter?
A: We do have Proton orders in our backlog, but the timing of their delivery is uncertain. Typically, the underlying gross margin is around 63% to 65%, but it will be boosted in quarters with Proton deliveries. It's too early to say if this will happen in Q4. - Linda Frölén, CFO
Q: When do you expect the acceptance test for the Proton orders to be completed, and can you disclose the amount tied up in working capital?
A: The timing of the final acceptance test varies by customer, making it difficult to predict. The working capital effect this quarter is largely due to Proton orders, but I cannot provide an exact number. - Linda Frölén, CFO
Q: Can you indicate if the tied-up working capital will be freed up in the fourth quarter or next year?
A: I cannot specify regarding the Proton orders, but managing the balance sheet is a primary focus for me as the new CFO. - Linda Frölén, CFO
Q: There was a private presentation at an Investor Day in September, after which the stock price dropped. Was asymmetrical information given to investors?
A: The information shared at the Pareto conference was not new. Any perception of asymmetry is due to how the information was reported, which is beyond our control. - Cecilia de Leeuw, CEO
Q: Do you understand the negative optics of the situation regarding the private presentation and its impact on investor confidence?
A: The information was not new, and the presentation or display by the reporter is their responsibility. - Cecilia de Leeuw, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
