Equity Research HANZA: First impression Q2, 2024

This morning, HANZA reported its Q2 2024 earnings. Below are our first impressions of the report.

• Earnings (EBITA) adjusted for restructuring costs were SEK 70m (92), about twelve per cent lower than we had expected.
• Sales in Q2 grew by 14 per cent, four per cent below our forecast. Excluding acquisitions and currency effects underlying sales declined by eight per cent, slightly worse than our estimates of about minus seven per cent. However, we believe this is in line with the development that sector peers have reported so far.
• The main deviation from our forecast was slower sales and lower profitability in the Main markets segment than expected; see below.
• Cash flow from operating activities was a bright spot and improved to SEK 135 million (86).
• HANZA’s view is still that a cyclical recovery in customer volumes will be seen towards the end of 2024. It also reports its largest order yet from the defence industry of SEK 134m, with deliveries to start in January 2025.
• We will probably revise our estimates downwards following the weaker-than-expected sales for the Main markets segment, indicating further short-term growth headwinds. The HANZA share had sold off before the report, as some Nordic contract manufacturers had already reported Q2 sales below estimates and lowered the guidance for 2024.

In the table below, we compare the Q2, 2024 reported sales and earnings vs our estimates.

Read our latest update on HANZA here.

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