Detection Technology - EBIT softer than expected
DT posted Q2 net sales in line with our expectations, while adj. EBIT fell short of our estimates. Medical market is showing increased uncertainty while security markets are expected to improve. Group sales anticipated to decline in Q3 and grow in H2’23.
- Group results: net sales increased by 10.8% y/y to EUR 25.2m, just in line with our expectations (25.2/25.2m Evli/cons.). The growth was driven by medical and security solutions. Adj. EBIT came in below our expectations and amounted to EUR 1.4m (1.9/2.0m Evli/cons.). The profitability was impacted by lower volumes, sales mix, increased credit loss provisions and spot-components. Necessary measures to normalize the profitability are now being taken. Group EPS accounted for EUR 0.03, which also fell short of our expectations (0.1/0.1 Evli/cons.).
- Medical (MBU): MBU’s sales grew by 22.3% to EUR 12.4m, quite in line with our expectations (Evli: 12.5m). The demand was however softer than DT expected, and the double-digit growth rate is largely due to soft comparison period. The demand for CT-solutions continued strong.
- Security (SBU): SBU’s revenue increased by 5% y/y to EUR 9.1m and came in above our expectations (Evli: 8.7m). The growth was backed by the markets of America and India, while China performed poorly. Outlook for security demand is expected to strengthen with bids and orders coming both from China and the US.
- Industrial (IBU): IBU’s net sales declined by 6.2% to EUR 3.7 (Evli: 4.0m), due to customers’ inventory corrections and soft market of China. The demand however recovered towards the end of the quarter.
- Haobo Imaging: the acquisition was closed after Q2, and DT’s expanded product portfolio has been enthusiastically welcomed by the markets. Haobo sales is expected to amount to a couple of million euros in H2’23.
- Outlook: Group revenue expected to decline in Q3, but grow in H2. DT expects MBU to decline, SBU to grow by double-digits, and IBU to grow in Q3.