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Apologies for that.
We had some technical issues here, but now we're back. I think we'll start all over again. So good morning, and welcome to this Q3 report. For me, I've now spent a little bit more than a quarter with MSAB, and it's been really interesting. And it has strengthened my belief that we have a really good product portfolio today and really good capabilities within our research and development teams.
And I look forward with enthusiasm that, with continuous investments in the product, can increase the growth rate going forward. That said, it has always a lead time between investments and when you see the results. So it will take some time, but I really look forward to delivering new products to the market and new capabilities as well.
Okay. So let's jump into the Q3 report then.
Yes. So you've got the key financials.
No, MSAB.
So net sales, we see being solid in this quarter at SEK 115 million. It's a little bit better than the same quarter last year. We have a gross margin which is at 93%, and that is because we are today more focused on delivering software and less hardware. And we think that's a really good gross margin. That gross margin also drives, of course, the operating margin down. So we have an EBIT of 27%, which we also are satisfied with.
So -- but let's go deeper into the financial summary. So Tony, our CFO?
Yes. Hello, everyone. Total net sales, as Peter mentioned, is SEK 115 million for the quarter isolated, which in terms of sales actually is the second highest quarter ever in the company's history, 6.7% better than the corresponding quarter versus last year. And FX adjusted, it's an increase of 8.4%.
Looking at the different regions where we have EMEA, Americas and APAC, EMEA has an increased growth of 19% versus the corresponding quarter last year. Americas has an increase of 2%, whereas APAC has a decrease in 27%. So the increase in EMEA was partly due to a shift in expected business from the previous quarter, Q2, but also newly won business in the period. That was the reason for the increase of 19%.
Americas revenues showed despite some delays in budget allocations of several large projects, which are expected to be realized in the next coming quarter, Q4. APAC performed a solid quarter despite the year-over-year decline, but that is partly explained by a strong first half year 2024.
So net sales accounted -- new sales accounted for 58% of the total sales, whereas the license renewals accounted for 42%. And the shift of higher new sales is partly explained by upgrades towards existing customers where our premium product, XRY Pro, increased in sales. So that we see as a positive design.
Looking at the costs, this quarter didn't contain any significant nonrecurring or restructuring costs in the numbers. And looking further into the OpEx, we see a shift between other external costs and personnel costs. That is explained by temporary staff vacancies and which is partly covered by temporary consultants that has been hired. That is why other external cost is a little bit higher than last year.
EBIT summarized to SEK 31 million, which also corresponds to an operating margin of 27%. And average full-time employees amounted to 175 compared to 189, and the decrease is due to layoffs in Q4 last year and Q1 this year.
Next slide.
So looking at the cash flow for the period, we see profit from -- after paid tax and noncash items compared to the corresponding period last year has increased, and that is due to the profit in the quarter actually. So the decrease in working capital is explained by higher accounts receivables. Ending August, we had SEK 45 million in accounts receivable. Ending September, we had SEK 86 million. So we are gaining some working capital there, the last month in the quarter.
Total cash flow for the period was minus SEK 3 million compared to minus SEK 2 million for last year. Cash effect still to be paid due to the layoffs earlier is SEK 9 million, and it's expected to be realized this year, Q4 then, and also some is spilling over to Q1 2025. Total cash at the end of the period was SEK 126 million.
Next slide, please. So consolidated balance sheet, not much has happened. We still have a strong balance sheet and a strong cash position closing the period. We have some things here. We have the leased/fixed assets and also the long-term/short-term liabilities. That is partly explained by the office rentals, IFRS 16, the [ Hällingsjö ] contract where we're sitting in the headquarters. So -- and other short-term receivables contain the increasing accounts receivable, and it's on the same level as last year. So yes, a solid balance sheet.
Financials in summary then. So we did a solid quarter financially, the best Q3 in terms of sales in the company's history. Good performance in EMEA region and a solid one in Americas and a slightly weaker performance in APAC, partly offset by a strong half year 1. We maintain a high gross margin. And through focus on software sales, we ended this quarter in 93% and have a good number on the gross margin for the accumulated numbers.
Still have a strong focus on OpEx, no restructuring costs and no recurring items taken in the quarter. EBIT was the second best ever in the company's history, ended at SEK 31 million with a good operating margin of 27%. And we still have a strong cash position for further growth.
Peter?
Okay. Thanks, Tony.
So next slide. Yes. So as Tony said, we have had a stable order intake during this third quarter, and we really could see that EMEA was coming back even though they still have something to prove if you look on the full year going forward. There has been a large number of renewal contracts, both in the U.K. and in Germany for renewals, where customers are really sticking to us. And we can also see then that our new XRY Pro product is really winning land in both EMEA and Americas. We see this as important. This is our key product really.
But we also see that there are clear interest in frontline, both in APAC and in Americas. So we see positive signs there as well. We have -- and we still have some delays in -- especially within the U.S. for military orders, but we hope that, that will be delivered in the coming quarters.
Next slide. So sales 2024, so we see continue that people are buying our products and using our products. We see that APAC and U.S. are on track to reach their yearly targets, where EMEA still have something to prove. In France, we see really a momentum after signing some big contracts there where opportunities will come on that contract going forward.
And we see an increased focus on military and border control customers all over the line, I would say. So we see that as a potential growth vector going forward. Our focus will be on execution and revenue results in the last quarter, which is, of course, our -- normally our best quarter. And that's -- we have a high focus on that. Okay.
So if we look a little bit what our priorities is when we move forward, I've already talked a little bit about this, but we see that we are in a good position with our products today, but also that we need to invest more in our product portfolio. And that is something that we have decided to do, and you will see new products coming in the 6 to 24 months now. Unify is really in the last phase now being tested by a lot of our key customers in EMEA and will be widely available then in Q1 2025, so it's within the last phase.
Then we also have our new Kiosk that we will launch, the MK4 for the frontline users, which we know that they are really looking forward to. And we also have a lot of investments in our current portfolio in terms of more capabilities within our products. So focus on the long term is really on execution, as always, something that's important in every company, but also on developing our strategic product portfolio in the next 6 to 24 months.
Okay, thanks. So in summary, we see this as a solid third quarter. I feel optimistic and so do the people in this company for the full year. We have a solid balance sheet. We have enough cash. And we will continue then to focus on development and investments in our product portfolio, and that will give effect in an increased growth within some time. So strategy to grow the revenues and market share we have, that is really our key priority and that stands firm.
Thank you. So then we are open for questions.
No questions in the chat so far. Okay. So question from Alexander. Revenues from training has decreased a lot this year compared to last year. How should we think about this going forward?
We are actually changing our training and developing it. So I think we will see a positive trend in the training going forward.
Could you also elaborate on OpEx growth in 2025 to 2026 since you mentioned increased investments going forward?
I don't think we want to forecast on our OpEx development. It's more -- we will invest, and it can be both external investments as well as investments in more competencies and people. So I don't want to make a forecast on how big that will be.
Yes. Next question then. You mentioned delayed budget allocations for large projects in the U.S. Can we expect those to materialize in Q4?
We hope so, and we believe that, that will happen. Some of them might also go into Q1, but we expect some significant revenues from the military contracts to happen in Q4.
Is it possible to mention the ratio between sales of 1-year licenses and 3-year licenses this year in relation to the last couple of years, how that has developed?
No, that's not the number we are giving.
No, that's not the number we provide.
I added some questions from Victor Höglund because he couldn't write in the chat.
All right. Let's have those then. So the headcount is reducing. What is the correct size of the company? And how will you get there?
Yes. So what you see now has really been -- it is the transformation within the company. So what we will do now, which we have repeated several times here, is that we will invest in research and development then. So that, you can expect that headcount to growth going forward. But you can expect most of the other headcounts to be stable.
Also another question then on the delays in the U.S. potentially to be delivered in Q4. Could you quantify this?
No.
Specify what you mean with the expectation of good revenue development over the coming 12 to 24 months?
I would say growing faster than the market and gaining market share.
And in regard to investing more in products, what level of investments are needed, do you think?
I don't want to comment on that. You will see.
Okay. Any other questions? Don't seem to be any more questions at the moment.
No more questions?
Last one here. Do you feel that you lack any products to accelerate growth even more in Americas and APAC?
Yes. I mean our customers is pointing out to us that iOS capabilities, more iOS capabilities is one of the things that they see that our products could gain more acceptance if we have. So that is one area, of course, that we are looking into.
Okay. I think that was the last question. So perhaps we round up there. And apologies to all of you attending for the technical issues we had at the beginning. Anything you want to add, Tony or Peter?
No. Thank you all for listening.
Thank you.
Okay. Thank you very much, everyone.
Thank you.