Solteq - Profit improvement weaker than expected
Solteq’s Q2 results fell short of our expectations. Retail & Commerce profitability remained decent despite declining sales, while Utilities continued to face challenges, with both net sales and EBITDA declining y/y and below our estimates.
- Comparable net sales in Q2 were EUR 12.1m (Q2’24: EUR 12.9m) vs. Evli EUR 12.6m, down 5.6% y/y. Net sales were EUR 12.2m (Q2’24: EUR 13.4m), down 9.3%.
- Comparable EBITDA was EUR 0.4m (Q2’24: EUR 0.5m) and EBITDA was EUR 0.6m (Q2’24: EUR 0.6m).
- Comparable operating profit was EUR 0.1m (Q2’24: EUR -0.1m) vs. Evli EUR 0.5m. Operating result was EUR 0.2m.
- Retail & Commerce: Comparable revenue in Q2 amounted to EUR 9.1m (Q2’24: EUR 9.5m) vs. Evli EUR 9.3m, which is a decline of 4.1% in comparable terms. The decline in revenue continued to be impacted by the market environment and customers slow decision-making. The comparable operating result was EUR 0.7m (Q2’24: EUR 0.3m) vs. Evli EUR 0.8m. Profitability continued to improve, but not as much as we expected.
- Utilities: Revenue in Q2 was EUR 3.0m (Q2’24: EUR 3.4m) vs. Evli EUR 3.2m, down 9.9% y/y. Adjusted EBIT came in at EUR -0.6m (Q2’24: -0.4m), below our estimate of EUR -0.3m. Performance was again weighed down by the consulting business. Also, the recurring revenue from software declined from the comparison period.
- Net debt amounted to EUR 21.3m (Q2’24: 24.0m).
- Guidance for 2025 (reiterated): Comparable revenue is expected to decrease slightly (2024: EUR 48.8m excluding the divested healthcare software solutions business), while comparable operating result is set to improve significantly (2024: EUR 0.7m).
- During the review period, Solteq announced new EVPs for both business segments.