Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Order intake increased by 28%, driven by strong demand in the Nordics.
- Net sales grew by 14% compared to the previous year, with significant contributions from Europe.
- Operating profit increased by 40%, despite currency fluctuations.
- The Swedish patent and Market Court of Appeal upheld a favorable ruling in a patent case, providing legal clarity.
- Engcon AB (FRA:917, Financial) is seeing strong market penetration in Europe, particularly in Germany and the Netherlands.
Negative Points
- Net sales in the Americas decreased by 14% due to low inventory levels.
- Currency fluctuations, particularly the strengthening of the Swedish krona, negatively impacted financial results.
- Order intake in Asia-Oceania dropped by 10%, affected by market caution in Australia.
- Supply chain disruptions could potentially cause delivery delays in the coming quarters.
- Increased competition in the Netherlands may impact future margins.
Q & A Highlights
Q: Were the supply chain disruptions only affecting the Americas, or were other regions impacted as well?
A: The disruptions in the Americas were due to low stock levels, and we have been producing to send over to the US. Other regions experienced smaller hiccups due to ramping up production, but we hope to avoid major problems in Q2. - Krister Blomgren, CEO
Q: Can you explain the seasonality of orders in the Nordics and Europe, and whether Q2 sales will continue to be higher than Q1 orders?
A: Historically, Q4 and Q1 are strong for order intake, while Q2 and Q3 are stronger for deliveries. The pattern depends on regional strength and seasonal factors, but with the Nordics bouncing back, we expect the historical pattern to continue. - Krister Blomgren, CEO
Q: How has the competition in the Netherlands affected margins?
A: Competition is trying to price themselves in, which might affect margins in the future. However, we have been successful in maintaining good margins, especially with our unique S coupler and full solution offerings. - Krister Blomgren, CEO
Q: How do you feel about maintaining the current gross margin level going forward?
A: If we maintain a certain level of revenues, it will be easier to keep the current margin level. However, factors like supply chain turbulence and currency fluctuations could impact margins. We aim to stay between 43% and 46% if current conditions persist. - Marcus Asplund, CFO
Q: Is there any scale-up necessary to handle the current sales volume increase?
A: The increase in staff is mainly in production to support ramping up. We have a flexible system in assembly, allowing us to meet demand efficiently. No other significant scale-up is needed in the short to mid-term. - Marcus Asplund, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
