Vaisala - Profitability improved above estimates
Vaisala posted Q3 results with net sales slightly below our expectations, yet EBIT was very strong and above our estimates driven by even stronger gross margin improvement than expected.
- Q3 group result: Orders received decreased by 8% y/y while order book stood at EUR 165.8m (+2%). Group net sales decreased by 2% to EUR 130.4m, slightly below above our estimates (139.2/137.8m Evli/cons.). Sales decline was mostly driven by the IM segment and FX effects for both of the segments. Gross margin improved to a very strong level of 58% (54.7% Q3/22). EBIT amounted to EUR 25.2m (23.8/24.5m Evli/cons.), reflecting a margin of 19.3%. EBIT improvement was mainly driven by the gross margin development. EPS amounted to EUR 0.51 (0.50/0.52m Evli/cons.).
- Industrial measurements (IM): Orders decreased by 14% (FX -8%) y/y and order book declined to EUR 34.3m (-12%). Net sales decreaed by 6% y/y to EUR 53.9m (FX 0%), below our estimates (Evli: 56.1m). Net sales decreased in life science and industrial instruments market segments, in liquid measurements market sales were flat. On the other hand, net sales in power and energy market segment grew very strongly. EBIT amounted to EUR 14.7m (27.3% margin) and was driven by lower amount of component spot purchases, price pressure especially in China and unfavorable product mix continued to burden the gross margin.
- Weather and Environment (W&E): Orders received declined by 2% (FX 2%) y/y yet order book was up by 7% y/y. W&E’s net sales grew by 1% (FX 4%) to EUR 76.4m, slightly below our estimates (Evli: 83.1m). The growth was strong in road weather and automotive and renewable energy, yet aviation market segment was down. Similarly to IM, improved gross margin due to lower amount of component spot purchases drove EBIT margin to 13.7% (9.9%).