Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AutoStore Holdings Ltd (FRA:1IG, Financial) reported revenue of $144 million, slightly above the guided range of $135 million to $140 million.
- The company maintained strong gross margins of 73.5% and adjusted EBITDA margins of 46.8%.
- Appointment of Keith White as the new Chief Commercial Officer, bringing valuable experience from Hewlett Packard Enterprise and Microsoft.
- Released new products, including an 18-level grid and multi-temperature solutions, enhancing storage density and system efficiency.
- Strong cash position with $280 million, allowing continued investment in future growth.
Negative Points
- Order intake was $144 million, showing a slight year-over-year decline and stagnation compared to the previous quarter.
- The market remains challenging, with contraction observed over the past couple of years.
- Sequential revenue decline reflects the current market environment affecting customer decision times.
- Days Sales Outstanding (DSO) increased to over 70 days, indicating potential delays in customer payments.
- Order intake remains flat sequentially, with a 5% decline from Q3 2023, indicating ongoing market challenges.
Q & A Highlights
Q: Can you provide more details on the regional performance, particularly why EMEA showed growth while North America and APAC did not?
A: Mats Vikse, CEO: The market remains challenging globally, but EMEA has shown more positive development compared to North America and APAC. This is not due to structural differences but rather a reluctance in decision-making in North America. Interest in automation remains high across all regions.
Q: Why has the Days Sales Outstanding (DSO) increased, and are there any concerns about delayed customer payments?
A: Paul Harrison, CFO: The project nature of our business causes timing fluctuations in receivables. We maintain a high-quality receivables book, and the increase in DSO is not indicative of payment delays.
Q: Can you discuss the current backlog and the share of projects scheduled for delivery next year?
A: Paul Harrison, CFO: The backlog is mostly less than 12 months old, with a significant portion scheduled for delivery next year. There have been no cancellations, indicating a healthy backlog.
Q: How sustainable are your current gross margins, and should we expect them to remain in the 70s?
A: Paul Harrison, CFO: We believe a gross margin starting with a seven is sustainable. While there are variables affecting gross margin, we expect it to remain in the 70s going forward.
Q: What are the main reasons for clients delaying orders, and how does this affect your growth strategy?
A: Mats Vikse, CEO: Delays are due to macroeconomic factors and lower volumes with customers, creating uncertainty. However, the interest in automation remains high, and less than 20% of warehouses are automated, indicating a significant growth opportunity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
