In This Article:
Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Medistim ASA (FRA:MD1) achieved its best quarterly sales results with a revenue of almost NOK145 million, marking a growth of 5.5%.
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The EBIT margin has improved significantly from 16.4% in the fourth quarter of last year to 28.5% in the second quarter of 2024.
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The third-party product portfolio showed strong performance, growing 17.7% in the second quarter.
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The Americas region, particularly Canada and Latin America, showed positive growth, contributing significantly to sales.
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The company maintains a solid cash position with NOK107 million after a dividend payout, indicating strong financial health.
Negative Points
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Operating profit (EBIT) is slightly down compared to last year, ending at NOK41.3 million.
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Asia Pacific sales are down 15% due to the transition from distributor to direct operations, impacting overall growth.
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Increased operating expenses due to the establishment of direct sales operations in China, Canada, and Sweden.
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Inventory levels have increased due to securing end-of-life components and previous supply chain issues.
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Cash flow from operations is down, influenced by prepayment of taxes and increased working capital driven by inventory.
Q & A Highlights
Q: Can you elaborate on the revenue growth for the second quarter and the factors contributing to it? A: Kari Krogstad, CEO, explained that Medistim achieved a revenue of almost NOK145 million for the second quarter, marking the best quarterly sales result in the company's history. This represents a growth of 5.5%, with a currency-adjusted growth of 4.1%. The growth was driven by a 6% increase in the Americas and a 5% increase in EMEA, although Asia Pacific saw a decline of 15% due to ongoing transitions.
Q: What are the reasons behind the decline in EBIT despite the revenue growth? A: Thomas Jakobsen, CFO, noted that while EBIT was slightly down from last year, the EBIT margin is normalizing. The decline is attributed to increased operating expenses due to the establishment of direct sales operations in China, Canada, and Sweden, as well as the introduction of a double shift in production.
Q: How is the transition to direct operations in Asia Pacific affecting sales? A: Kari Krogstad, CEO, mentioned that the transition to direct operations in Asia Pacific, particularly in China, has temporarily impacted sales, resulting in a 15.5% decline for the quarter. However, the direct sales team in China is operational and contributing positively, with NOK7.3 million in sales for the quarter.