Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hanza AB (OSTO:HANZA, Financial) successfully completed a nine-month action program, indicating strong operational management.
- The company announced two significant contracts in Q3, expected to add 3%-4% organic growth.
- Hanza AB is on track to achieve an 8% operating margin by 2025, demonstrating effective cost management.
- The company has a diversified customer base, which has helped mitigate the impact of economic downturns.
- Hanza AB's strategic focus on expanding manufacturing clusters is expected to drive future growth.
Negative Points
- Hanza AB experienced an organic sales decline of 4% in Q3, reflecting challenges in the current economic environment.
- The integration of Orbit One, a recent acquisition, has temporarily lowered the group's operating margin.
- The company is preparing for a potential economic downturn that may extend into next year.
- Hanza AB incurred substantial one-time costs in Q3, impacting financial performance.
- The company's sales target of SEK6.5 billion for 2025 may require substantial acquisitions, which could pose integration challenges.
Q & A Highlights
Q: Can you clarify your financial targets, as the report suggests confidence in margin targets but not as much in sales targets?
A: Yes, we are more confident in achieving the margin target of 8% as it is within our control. The sales target involves expansion in certain areas, which is more complex and dependent on external factors. However, we are confident in our opportunities to grow in these markets.
Q: How is the demand situation in your most important customer segments?
A: We haven't disclosed specific company names, but we can discuss sectors. The mining industry unexpectedly declined, while defense increased. Our well-diversified customer base helps us manage these fluctuations, and we are close to achieving organic growth.
Q: What signs suggest a stronger market next year?
A: Predicting an upturn is speculative due to factors like the US election and the war in Ukraine. We are preparing for the recession to last into next year, despite signs of a potential upturn in 2025.
Q: Is the opening of the new facility in Sweden delayed?
A: No, it is opening as planned by the end of the year, with an opening ceremony scheduled for early next year.
Q: Regarding the demand situation, is the 8% organic fall in main markets more reflective of underlying demand, and is the 3% growth in other markets due to the Mitsubishi project?
A: The overall group figure reflects the customer base development. While the Mitsubishi project positively impacts other markets, we are also gaining market share, contributing to organic growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
