PowerCell (PCELL) Q2 2024 earnings summary

Executive summary

• Achieved 6% net sales growth in Q2 2024 and 17% growth on a rolling 12-month basis, with record sales and ramp-up for serial deliveries, mainly driven by marine segment expansion.

• Transitioning from short-term project sales to long-term OEM-driven sales, resulting in longer sales cycles but stronger market positioning.

• Launched the Marine System 225, an upgraded product with a 12.5% improved power rating, securing its first OEM order within weeks of launch from a leading European OEM.

• Received a government loan converted into a SEK 30m grant, positively impacting operating income.

• Focused on OEM customer orders, US expansion, and scaling product generation toward breakeven.

Financial highlights

• Q2 net sales: SEK 66.3m (up 6% YoY); rolling 12-month net sales up 17% to 315.8 MSEK.

• Q2 gross profit: SEK 11.0m; gross margin: 16.6% (impacted by SEK 8m inventory revaluation); YTD 30.0%; rolling 12-month gross margin at nearly 38%.

• Royalty income from Bosch increased to SEK 4.6m in Q2 and SEK 23m on a rolling 12-month basis.

• Operating cash flow in Q2 was -SEK 50.6m, with year-to-date at -SEK 11.9m, impacted by working capital and timing of payments.

• SEK 10.4m capitalized in intangible assets for product development in Q2.

Outlook and guidance

• Focus remains on expanding OEM customer base, transitioning to long-term contracts, and scaling production to achieve breakeven and balanced cash flow.

• Continued growth and expansion targeted in the U.S., leveraging favorable market conditions and subsidies.

• Accelerating industrialization of next-generation heavy-duty and medium-duty fuel cell platforms.

• Confident in maintaining growth momentum in H2, with more OEM activity and shorter order-to-delivery times.

• Macroeconomic uncertainty and customer investment timing may impact short-term growth, but long-term prospects are positive.