Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CTEK AB (OSTO:CTEK, Financial) reported a 15% organic growth in net sales for Q3 2024, reaching SEK252 million.
- The company achieved an increase in gross margin by 4.8 percentage points to 56.4%.
- Adjusted EBITDA improved significantly from SEK18 million to SEK30 million, representing a margin increase from 9.1% to 13.6%.
- The consumer division experienced its strongest third quarter ever, contributing two-thirds of the net sales.
- CTEK AB (OSTO:CTEK) has successfully expanded its market presence, gaining new customers and increasing sales with existing ones, particularly in the low voltage segment.
Negative Points
- The professional division reported a loss at the EBITDA level, despite showing some improvement.
- Cash flow remained negative at minus SEK3 million, although it improved from minus SEK14 million in the previous year.
- Sales in North America are still very low, with limited visibility on future growth in this region.
- The EVSC market is generally slow, impacting the rollout of new products like the CC3.
- The company faces tough comparisons for Q4 due to favorable weather conditions in the previous year that boosted sales.
Q & A Highlights
Q: How does the weather impact your Q4 outlook, considering last year's cold winter?
A: We acknowledge the tougher comps due to last year's cold weather but see a stable business. We are not providing specific guidance for Q4 but have improved our sales force and processes, gaining customer momentum. - Henrik Fagrenius, CEO
Q: Are you gaining market share in the US for the low voltage segment?
A: We are growing with a 15% increase, though detailed market share analysis is unavailable. We are gaining new customers and expanding with existing ones. We recently moved production to Malaysia to avoid tariffs, aiming to expand in North America. - Henrik Fagrenius, CEO
Q: Will the move to Malaysia affect your gross margins?
A: Historically, our prices were slightly high in North America. We plan to adjust prices to be more competitive while maintaining good gross margins. - Henrik Fagrenius, CEO
Q: Can you comment on the impact of General Motors' sales growth on your business?
A: We have low sales in North America and limited visibility on GM's impact. However, we are optimistic about low voltage growth with our production shift to Malaysia. - Henrik Fagrenius, CEO
Q: What factors contributed to the professional division's EBITDA improvement?
A: The improvement is primarily due to the sales mix, with strong sales in client brand low voltage, enhancing gross margins. - Henrik Fagrenius, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
