Energy Save: EBIT slips back into the red - ABG

Sales of SEK 49m -38% q-o-q, EBIT back to negative at SEK -8m
We lower FY'24/25e-FY'26/27e sales by 30-4%
Aira sales on track, waiting for ramp-up of other OEM partnerships


Q2: A pause in the improving sales trend

Q2'24/25 sales declined 38% q-o-q to SEK 49m (ABGSCe 79m), but were still up 46% y-o-y. Sales were driven by deliveries to Aira (we estimate ~90% of sales), as ES-branded sales remained subdued. In addition, we fear that inventory adjustments and a slower-than-expected market recovery will result in stable sales q-o-q until Q4'24/25, but a 2-13% y-o-y decline in fiscal Q3-Q4, before returning to y-o-y growth in mid-2025. On a positive note, we believe that improving end-market activity in key regions recently and the good sales activity at Aira (sales of ~SEK 100m) should support a return to growth. EBIT was SEK -8m (ABGSCe +1m), vs. SEK +0.3m in Q1, and we do not expect a return to profitability until volumes start to improve. We find it positive to see that inventory declined further, and we estimate that ES' ~SEK 48m cash balance will be enough until FCF turns positive in late FY'25/26e (-7m in Q2).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/energy-save/Equity-research/2024/12/energy-save---ebit-slips-back-into-the-red-/