Good revenue growth with increased profitability and cash flow

- Order intake amounted to EUR 39.9 million, a decrease by -4.8%
- Order backlog amounted to EUR 120.6 million, a decrease by -2.4% from year-end 2023
- Revenue increased 8.5% to EUR 42.9 million (39.5)
- EBIT increased 538% to EUR 2.0 million (0.3) and the EBIT margin improved to 4.5% (0.7%)
- Net result for the period increased to EUR 0.5 million (-1.3)
- Operating cash flow improved to EUR 0.05 million (-2.9)
- Earnings per share, basic and diluted, increased to EUR 0.005 (-0.014)
- Net debt decreased to EUR 17.3 million from EUR 18.6 million at 31 December 2023 and the leverage ratio improved to 1.09x from 1.29x

Comment from the CEO
Increased service sales, profitability and cash flow

Our performance improved also in this quarter, proving our extensive change programs with focus on profitable growth to be effective. We are successful with our focus on the service business and the margin-improving measures are beginning to have an effect. We continue to implement our change programs and see that we have the potential for continued improvement. International regulations continue to drive the demand for our electrical solutions for the maritime industries while we see that our more cyclically dependent customers are a bit cautious with their investments.

Revenue increased 8.5% in the quarter to EUR 42.9 million, mainly driven by strong demand for services and increased deliveries of shore power solutions for container vessels. The latter were already signed in 2022 and show the long lead times in our project business. Currency effects had an impact of -1.2% on total revenue in the quarter.

EBIT continued to improve, increasing to EUR 2.0 million from EUR 0.3 million in the in the same period last year. The EBIT margin strengthened to 4.5%. The improvement is a result of our strategic priorities with associated change programs, which has been successful in the Ports & Maritime segment. As part of the programs, we have for example focused on operational efficiency and improved production processes to raise profitability in the order backlog. This has resulted in a normalization of the order backlog in Ports & Maritime.

We still have a lot to do in our change programs, among other things we are to enhance the efficiency in the Industry segment and our supply chain. At the same time as we work with our improvements in costs and efficiency, we continue to increase activities within service and product development. We see great potential in the service area, not least in our large and continuously growing installed base worldwide, and invest in product development to maintain our competitiveness and leading position in electrification solutions.

It is also very satisfying to see that the cash flow continues to improve and grew to EUR 0.05 million from EUR -2.9 million. The increase in cash flow is a result of internal programs, launched in 2023 aimed at improving working capital, strengthening the financial position and lowering our financing costs. These efforts will continue in 2024 with the same intensity.

A cyber incident early in the second quarter is now closed and under control. The incident incurred some costs and delayed certain deliveries, and will have an impact on the second quarter operating result of approximately EUR 1-2 million. Cavotec is covered by cyber insurance. 

Significant progress in service
To increase transparency, we have started to report the order intake from this quarter. Order intake decreased -4.8% to EUR 39.9 million and order backlog decreased slightly from the end of 2023, -2.4% to EUR 120.6 million. We have announced a number of significant contracts during the quarter, both for services and product solutions. In February, we announced the order to supply shore power solutions to a major European shipping line worth USD 5.7 million. About a month ago, we announced another shore power contract from a global shipping company, worth about USD 5 million. The services agreements that we have announced clearly demonstrates the potential in this area. We have signed a two-year service agreement with APM Terminals at Port of Tanger and a break-through agreement with a major port in North America to provide all services on the shore power systems we have installed. This deal is groundbreaking for us since will take care of the plug in and plug out the power units for the first time. This provides us with valuable insights in how we can further improve our products while ensuring that the equipment is operated in the most efficient way. Yesterday, we announced a two-year service agreement with Port of Salalah in Oman where we will provide support for our 32 installed MoorMaster vacuum units. This is a good example of how we generate business based on our installed base.

Last year we took the strategic decision to establish an assembly facility in India to better serve the important Indian market and explore an attractive supplier base. I have just returned from a week in India visiting several clients in a booming market and I am now even more confident that this was the correct strategic move to make. The facility is now operational, and the official inauguration will take place this summer. We are meeting a lot of interest in our offering and have signed the first orders with Indian based customers. However, we expect it will take some time to ramp up larger volumes.

Change in Cavotec Management Team
Our efforts in improving profitability were most intensive in the Ports & Maritime segment during 2023. This work continues to have the highest priority in 2024, with particular focus on the Industry segment. Since April of this year, I have been acting as President of the Industry segment as we look for a permanent solution. I would like to take this opportunity to thank Simone Sguizzardi, former President of the Industry segment, for his efforts and contributions to Cavotec, and wish him success in his next role outside the Group.

Electrification is driving our business
Our business is driven by the megatrend of electrification of society. Our largest segment – Ports & Maritime – is also driven by extensive international regulations to reduce greenhouse gas emissions in marine environments and noise levels in ports. These strong driving forces, combined with our clear strategic priorities, give us good conditions to continue to improve our performance and to be a key player in the transition to a more sustainable society.

David Pagels
Chief Executive Officer

Webcasted presentation and telco
CEO David Pagels and CFO Joakim Wahlquist will present the interim report on Wednesday 15 May at 10:00 am CEST. If you wish to participate via webcast, please use the link https://ir.financialhearings.com/cavotec-sa-q1-report-2024. Via the webcast you may submit written questions. If you wish to participate via teleconference, please register on the link https://conference.financialhearings.com/teleconference/?id=50048865. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. The presentation is in English.

Interim reports on cavotec.com
The full report and previous interim and annual reports are available on https://ir.cavotec.com/financial-reports.

Next report
The second quarter report is published 25 July 2024 at 7:00 am CEST.