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Detection Technology - Strong Q3 EBITA margin

DT’s Q3 earnings were slightly better than estimated as EBITA margin already topped 15%, however the company also trimmed its growth outlook for the next couple of quarters.

  • DT Q3 revenue increased by 10.6% y/y to EUR 27.1m, compared to the EUR 27.6m/27.4m Evli/consensus estimates, while adjusted EBITA was EUR 4.2m vs the EUR 4.0m/3.8m Evli/consensus estimates. Profitability topped the 15% medium-term target, enabled by growth, improved productivity and sales mix. Result is expected to slightly improve in Q4. 
  • Medical (MBU) revenue increased by 0.6% y/y to EUR 10.9m, compared to our EUR 11.3m estimate. Sales still lagged behind expectations as the Chinese market has remained challenging and price competition has continued. Sharp market decline has however stopped and the Chinese market is likely to recover slowly. MBU sales are expected to decline slightly y/y in Q4. 
  • Security (SBU) gained by 16.2% y/y to EUR 11.3m vs our EUR 11.2m estimate. Sales grew at an above-market rate, boosted by both CT and line scanner detector solutions for the aviation industry. The outlook for Western aviation markets remains strong, in addition to which border control and critical infrastructure security investments should accelerate. SBU growth should continue q/q in Q4 but remain flat y/y. 
  • Industrial (IBU) revenue grew by 24.0% y/y to EUR 4.9m, compared to our EUR 5.1m estimate. Food industry demand was strong but also in industrial CT imaging and the specialty tire industry. Line scanner products in particular saw growing demand. IBU sales grew at an above-market rate in Q3, and growth should continue in Q4 albeit at a clearly more moderate rate.
  • DT expects its revenue to remain stable y/y in Q4’24 and Q1’25; the company refines its previous outlook of double-digit growth in H2’24 to growth in H2’24.
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