Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eckert & Ziegler SE (XTER:EUZ, Financial) reported a 23% increase in sales for the first half of 2024, with the medical segment growing by 32%.
- The company achieved an EBIT adjusted margin of 22%, surpassing their 20% target.
- Net income grew by 65%, demonstrating strong financial performance.
- The company received the Best Managed Companies Award, highlighting effective management and operational success.
- Eckert & Ziegler SE expanded its market presence in North America, contributing to a 42% growth in that region.
Negative Points
- Higher costs of goods sold (COGS) and raw material expenses impacted profitability.
- The company is facing hyperinflation effects from Argentina, affecting business by approximately EUR 2 million annually.
- Despite strong growth, the company anticipates a slowdown in the oil well logging business in the second half of the year.
- Investment in the actinium production site in Europe has been slower than planned, affecting capital expenditure execution.
- The company has a higher than anticipated cash position due to delayed capital expenditures.
Q & A Highlights
Q: Can you provide more details on the growth in the medical segment, particularly in the US market?
A: The CEO, Harald Hasselmann, explained that the medical segment experienced a 32% growth, driven by strong performance in the US market. This was largely due to increased sales of radiopharmacy generators, including the 100-millicurie generator, which is twice as active and priced higher than the 50-millicurie generator. This demand has significantly boosted the company's income in the pharma business.
Q: What factors contributed to the extraordinary growth in the isotope business?
A: The CEO highlighted that the isotope business saw a 16% growth, primarily due to the oil well logging business, which delivered substantial profits. This segment's EBIT adjusted grew by 71%, from EUR10 million to EUR18 million. However, this growth is not expected to continue at the same rate in the second half of the year.
Q: How is the company managing increased costs, such as higher COGS and HR expenses?
A: Harald Hasselmann noted that while there are increased costs, the company has managed to offset these by raising prices, particularly in the isotope area. Additionally, the company has seen an increased gross margin due to the oil well logging business, which has contributed to higher performance.
Q: What is the impact of currency effects on the company's financials?
A: The CEO mentioned that there were positive currency effects that helped counterbalance the hyperinflation impact from Argentina, which affected the business by approximately EUR1 million in the first half of the year. These currency gains, along with sales growth and price increases, contributed positively to the company's financial performance.
Q: Can you elaborate on the company's outlook for the remainder of the year?
A: Harald Hasselmann stated that the company is confident in achieving its revised guidance, with expected revenues in the range of EUR265 million and profitability projected to be 10% higher than previously calculated, reaching EUR55 million. The company is well-positioned to navigate the remaining part of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
