Solteq - Challenging quarter
Solteq’s Q2 fell short our expectations, with revenue at EUR 17.9m (Evli EUR 19.9m) and adj. EBIT at EUR 0.6m (Evli EUR 2.0m). Challenges were caused by the development of software products in the Solteq Utilities business and the resulting increase in project delivery costs.
- Net sales in Q2 were EUR 17.9m (EUR 18.5m in Q2/21), below our estimates (Evli EUR 19.9m). Growth in Q2 amounted to -3.0% y/y.
- The operating profit and adj. operating profit in Q2 amounted to EUR 0.4m and 0.6m respectively (EUR 2.4m/2.5m in Q2/21), clearly below our estimates (Evli EUR 2.0m/2.0m).
- Q2 was challenging for Solteq, with main challenges caused by the development of software products in the Solteq Utilities business and the resulting increase in project delivery costs. Despite the challenges, the outlook for Solteq Group’s international and domestic business is estimated to remain positive.
- Solteq Digital: revenue in Q2 amounted to EUR 11.4m (Q2/21: EUR 11.9m) vs. Evli EUR 12.6m. Growth amounted to -4.1%. The adj. EBIT was EUR 1.5m (Q2/21: EUR 1.9m) vs. Evli EUR 1.9m. Demand in key business areas, such as digital business and commerce solutions, is expected to remain at a good level during the ongoing quarter.
- Solteq Software: Revenue in Q2 amounted to EUR 6.5m (Q2/21: EUR 6.6m) vs. Evli EUR 7.3m. The adj. EBIT was EUR -0.9m (Q2/21: EUR 0.6m) vs. Evli EUR 0.1m. Growth was -0.9%. The business outlook for Solteq Software is expected to remain positive.
- Guidance for 2022 (reiterated): group revenue is expected to grow and operating profit to weaken.