Half Year 2026 Detection Technology Oyj Earnings Call Transcript
Key Points
- Detection Technology PLC (OHEL:DETEC) reported a 5.1% year-on-year sales growth in Q2 2026, reaching $25.6 million, with a slight improvement in EBITDA margin to 7.1%.
- Medical sales grew strongly by 21%, driven by global CT demand, and TFT deliveries for medical applications have commenced.
- TFT sales grew 20% in the first half, now representing 10% of total revenues, with 20% of TFT sales coming from outside China, indicating successful diversification.
- The company has launched over 60 TFT products, including the world's largest fast panel (43,108) and its faster sibling (4,386), positioning it as a leader in high-value industrial and defence inspection.
- New production and sales sites in India and Shanghai, along with expanded European manufacturing in Oulu, are expected to support future growth, with the India site recently receiving a medical device manufacturing license.
- The company plans to transition to IFRS reporting from Q4 2026, which is expected to improve comparability with peers and potentially enhance reported results.
- Security sales declined 8% in Q2, primarily due to continued weakness in the Chinese market, which is expected to persist in the near term.
- Industrial sales decreased 6% year-on-year, with a decline in line scan sales in APAC China, partially offset by TFT growth.
- Profitability in Q2 was impacted by a product mix heavily weighted toward medical, which has lower margins, and increased fixed costs from building the India factory.
- Cash flow was negative at -$600,000 due to long-term investments and increasing inventory levels, though inventory is expected to peak soon.
- The company faces challenges from customers in China increasingly using in-house sources, reducing its market share in that region.
- Management expects security sales to continue declining in the second half, which could weigh on overall growth and profitability.
Good afternoon. Welcome to Follow Detection Technologies second quarter result announcement. My name is Hannu Martola. I am the President and CEO of Detection Technology and I am pleased to present.
Second quarter, we reached sales of $25.6 million, which is a 5.1% growth year on year, reached EBITDA of $1.8 million, which is slightly better than last quarter 1.7 year on year, and then EBITDA percentage yielding out to 7.1%, again, slightly better than a year before year on year.
Where did it come from? So, the growth continued. It was very much driven both by medical applications and TST.
Good news is that the TST growth now started also in the Western markets, but then in total, China weighed on both our security and industrial sales. Total industrial sales were negative 6%. Sales of line scans in APAC China declined, but then TFT sales grew in APAC, but also in all geographical markets for industrial. Medical sales, strong growth of 21%, driven by global CT demand,
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