Detection Technology - Softer than expected
DT’s Q1 was expected to remain slightly muted, but the reported figures were clearly lower than estimated. DT’s short-term outlook has also softened mainly due to a prolonged dip in security applications demand.
- DT Q1 revenue declined by 2.0% y/y to EUR 22.2m, compared to the EUR 22.6m/22.7m Evli/consensus estimates. Exchange rate fluctuations impacted the figure toward the end of the quarter. EBITA landed at EUR 1.4m vs the EUR 2.1m/2.3m Evli/consensus estimates. Less favorable mix and timing of other income and certain expenses negatively affected profitability. Exchange rates affect top line, but their bottom line impact is mitigated by a similar currency mix in costs.
- Medical (MBU) revenue grew by 13.7% y/y to EUR 10.8m vs our EUR 9.8m estimate. Demand backlog due to the Chinese anti-corruption campaign has begun to ease, and demand remains good.
- Security (SBU) decreased by 20.0% y/y to EUR 7.7m, compared to our EUR 8.7m estimate. European aviation CT system installations delay negatively affected sales, while American security application demand was also weaker than expected. Customers have however indicated that their order backlog is strong, but the security applications demand dip appears to be a bit prolonged.
- Industrial (IBU) grew 4.2% y/y to EUR 3.8m vs our EUR 4.1m estimate. TFT flat panel detector sales grew significantly. Demand continues to develop positively.
- DT now expects its top line to remain stable in Q2 and Q3, while it previously expected double-digit growth for the remainder of the year. The main reasons for the downgrade are exchange rate changes and the postponement of security system deployments. The new tariffs’ direct impact appears to be limited for now, however indirect effects are difficult to foresee.