Energy Save: Soft Q2 triggers profit warning - ABG

Sales and EBIT miss of SEK 22m and 7m vs. ABGSCe
This afternoon, Energy Save issued a profit warning and presented sales of SEK 15m for Q2 (vs. ABGSCe 37m, -71% q-o-q). The sales miss was mainly due to OEM customers postponing orders due to temporary inventory build-up. We believe this is mainly attributable to the strong sales ramp-up in previous quarters to main customer Aira. The company states that it instead expects these orders to be placed in Q3 and, in particular, Q4. EBIT also declined, primarily due to weaker sales, to SEK -18m (vs. ABGSCe -9m, -4m in Q1).

Bank loan of SEK 25m secured
To mitigate liquidity risk from the lower net sales in Q2, the company secured a SEK 25m short-term bank loan in July, 80% of which is guaranteed by the Swedish Export Credit Agency. With this loan in place, and supported by an expected pickup in volumes during H2’25e, we believe the company’s near-term financing needs are covered. In addition, the majority of the company’s OEM deliveries are direct deliveries, meaning that payments are typically received at the time of delivery. The company ended Q1'25 with a cash balance of SEK 29m, which can be compared to the R12m FCF of SEK -40m.

Market recovery needed
On numbers alone '25e-'27e sales is impacted negatively by 9-5%, and EBIT by -7m (vs. FY25e EBIT of SEK -16m). Despite the weaker Q2, we anticipate an upturn in H2'25e, driven by normalising inventory levels and a gradual market recovery. We note that the pace of recovery remains uncertain but that the market troughed in mid-2024 and should continue to improve in future quarters. For reference, we note that heat pump sales volumes in key regions such as Sweden, Germany and the Netherlands grew ~40% y-o-y in Q1, and recent market activity indicates a continued uptick in Q2. This should be supportive also for sales activity for ES and its OEM customers. The share is currently down 16% (-20% YTD) since the announcement, and we believe today's news adds to estimate uncertainty and thereby increasing the risk that a return to positive earnings and cash flow could be further delayed. We await the full numbers from the Q2 report, which will be released on 15 August. The company is trading at 7x-3x '26e-'27e P/E on our pre-profit warning estimates.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/energy-save/Equity-research/2025/7/energy-save---soft-q2-triggers-profit-warning/