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Saabtec reported a solid financial performance for the first quarter of 2025, with a 16% year-over-year increase in revenue, reaching NOK 347 million. The company also witnessed a significant rise in order intake and maintained a robust order backlog. Despite a slight dip in gross margin, Saabtec’s strategic expansion efforts across Europe are expected to drive future growth. The stock’s recent performance reflects these dynamics, trading at $25.39, near its 52-week high of $26.23. According to InvestingPro data, the company has shown strong momentum with a 6.32% return over the past six months and maintains a "GOOD" Financial Health Score of 2.52.
Key Takeaways
- Saabtec’s Q1 revenue rose by 16% year-over-year to NOK 347 million.
- The company launched new products and expanded its market presence in Europe.
- Order intake increased by 20% year-over-year, with a firm order backlog of NOK 5.7 billion.
- Gross margin declined by 1 percentage point from the previous quarter.
- Stock price experienced a 1.45% decline in the latest trading session.
Company Performance
Saabtec’s performance in Q1 2025 highlights its ability to capitalize on the growing demand for electric vehicle (EV) charging solutions in Europe. The company, with a market capitalization of $59.25 million, has strategically positioned itself as the largest home charging provider in the region, contributing to its revenue growth. Despite a slight decrease in gross margin, Saabtec’s expansion into key markets such as Germany, the UK, and Benelux is expected to bolster its competitive position. InvestingPro analysis reveals 13 additional key insights about Saabtec’s market position and growth potential, available to subscribers.
Financial Highlights
- Revenue: NOK 347 million (+16% YoY)
- Gross Margin: 39% (down 1 percentage point from Q4)
- EBITDA: NOK 14 million (+NOK 16 million YoY)
- Order Intake: NOK 366 million (+20% YoY)
- Firm Order Backlog: NOK 5.7 billion
Outlook & Guidance
Looking ahead, Saabtec anticipates 2025 to be a record year for revenue, driven by the continued recovery of the EV market and strategic market expansions. InvestingPro data supports this optimistic outlook, indicating that net income is expected to grow this year, with analysts predicting profitability. The company projects a sixfold increase in revenue potential over the next decade, aligning with the expected growth in EV sales and charging station installations across Europe. Get access to Saabtec’s comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ top stocks, for detailed analysis and actionable insights.
Executive Commentary
CEO Kurt Estrrem expressed confidence in the company’s growth trajectory, stating, "We can increase our revenue by six times the next ten years." CFO Erik Herem emphasized the importance of operational efficiency, noting, "We remain committed to drive scalability and to have OpEx at a controlled and sustainable level."
Risks and Challenges
- Supply Chain Issues: Potential disruptions could impact production and delivery timelines.
- Market Saturation: As competition intensifies, maintaining market share could become challenging.
- Macroeconomic Pressures: Economic downturns could affect consumer spending on EVs and related infrastructure.
- Regulatory Changes: Evolving regulations in different markets could pose compliance challenges.
Saabtec’s strategic initiatives and market expansion efforts position it well for future growth, despite current challenges. The company’s focus on innovation and operational efficiency is expected to drive long-term value creation.
Full transcript - Zaptec AS (ZAP) Q1 2025:
Kurt Estrrem, CEO/Presenter, Saabtec: Welcome to SAPTECH and the presentation of the first quarter financial results. My name is Kurt Estrrem, and together with Erik Herem, we will take you through the financial highlights for the first quarter. Saabtec is building momentum with improved KPIs in the first quarter, with increased revenue and increased EBITDA. The strong order intake continue in the first quarter, and we have a solid backlog and huge visibility for future sales in 2025. In the first quarter, we were also recognized as the largest home charging provider in Europe in 2024.
This is something we are really proud of. We have ongoing ramp up of new products in large markets. We control the OpEx and focus on innovation and sales. We have also further reduced our inventory and improved the liquidity in the first quarter. So all in all, the first quarter was a strong quarter for Subtech.
We will now take you through the figures for the first quarter.
Erik Herem, CFO/Financial Presenter, Saabtec: Yes. So I’ll take you briefly through the highlights before we dive into more detail later in the presentation. Revenue in Q1 came in at NOK347 million. This is an increase of 16% compared to Q1 last year. We had a strong order intake of NOK366 million further strengthening our backlog of firm orders, which amounted to NOK $5.00 7,000,000 at the end of Q1.
The gross margin was 39% in Q1 compared to 38% in Q1 last year. We spent NOK120 million in OpEx, leaving us with NOK14 million in EBITDA. This is NOK16 million higher than Q1 last year. So I’ll leave it back to Juukert to go a bit more into detail.
Kurt Estrrem, CEO/Presenter, Saabtec: The revenue in the first quarter was $347,000,000. This is an increase of 16% compared to the first quarter last year. And NOK $347,000,000 in the first quarter is all time high for Saptec in the first quarter. As you can see, the first quarter is normally the lowest quarter in the year. So this gives us a strong outlook for continued growth in 2025 compared to last year.
Also, order intake came up strong in the first quarter with NOK $366,000,000. This is a 20% increase from the first quarter last year. And we have firm order backlog at the end of the quarter at $5.00 7,000,000. And we expect the second quarter to be even stronger when it comes to order intake, as we expect to secure a significant portion of the second half revenue in this quarter.
Erik Herem, CFO/Financial Presenter, Saabtec: Okay. So let’s look into our gross margin in a bit more detail. The gross margin was impacted by significant currency fluctuations in Q1. The NOK strengthened compared to most European currencies in the quarter, including the euro, the Swiss franc and the British pound. Subtech’s high export share means that we are exposed to a stronger NOK.
It leads to a negative top line effect in the short term when the NOK strengthens as we sell in the foreign currency. In addition, on the COGS side, there is no similar currency effect. This is based on the inventory of finished goods we hold and also the first in first out accounting principle. In sum, this leads to a softer gross margin, which is what we saw in the first quarter. And as you can see on the graph, it’s around one percentage point lower in Q1 compared to Q4.
That said, the outlook for improved gross margin is still solid. And this is based on a couple of things. Firstly, we are still to realize the full impact from lower production costs. We have reduced the production cost, but due to inventory and first in first out accounting principle, the results are yet to materialize in the results. On top of that, Saptic Go II has a significantly higher gross margin compared to the Sautek O.
When we do ramp up the production of Sautek O II later in the year, it will increase our gross margin. Also, it’s worth noting that in the second quarter, so far, the NOK has weakened again. This is following the global trade war initiated by President Trump in early April. So even though we cannot predict the currency fluctuations in the short term and we’re not trying to do so, it looks like this effect is not the same in Q2 as it was in Q1. Okay, so let’s look into our earnings.
As you can see on the graph here, EBITDA increased NOK16 million from Q1 last year to Q1 this year. We delivered NOK 14,000,000 EBITDA in the quarter, which is around 4% margin. As we now look forward, we have strong outlook for increasing the EBITDA further. We have a scalable business model and we have demonstrated that we can grow the top line more than we grow the costs and we will come back to the costs as well. So the outlook for EBITDA is solid.
I also want to point out that if you look at the last twelve months rolling, we now have delivered over million in EBITDA, which again, it demonstrates that we are on the right track to drive EBITDA up.
Kurt Estrrem, CEO/Presenter, Saabtec: 2024 was a challenging year for the EV industry in Europe. But we have said for a long time that the market will recover during 2025. And we are glad to see that already in the first quarter, we see a strong increase in EV sales in Europe, increased by 20% compared to the first quarter last year. And it’s also good to see that many of our strong core markets have a strong growth in the first quarter, like Denmark and Norway, but also that new important markets for SUBTECH like Germany and UK have a strong EV sales in the first quarter. We also see that other strong markets for SUBTAKE like in Switzerland with a weak EV sales.
Despite that, we increased the market share in Switzerland in the first quarter. And the same happened in The Benelux with a really strong increase in revenue for SUBTECH despite a weak EV sales in that market. The European EV sales is expected to grow approximately with 23% per year the next decade, despite the uncertainty we see these days in the world market. In 2024, there were sold about 2,500,000 new EVs in Europe. The next ten years is expected that this sales will increase by six times.
And in 02/1935, there can be yearly sales of new EVs for up to 15,000,000 cars each year. This is really good news for Subtech. Just by following the market, we can increase our revenue by six times the next ten years. But we are also going into new market and we expect to increase our market share in this new market. And together with launching of new features and new products in this same period, this is really a positive outlook for Subtech to increase and have a really high growth the next ten years in Europe.
And to succeed and manage this high growth, we will build on our success in our core markets. We will also ramp up the production and the deliveries of new product, and we will expand in major markets. And all the time, we will drive improvements to maximize our cash flow. Subtech was named as Europe’s top home charging provider in 2024 by the LCP Delta, who is an independent EV market expert. This is something we are really proud of and also a recognition of the hard work all our fantastic employees laid down every day to provide you with the best charging solution.
More than one of 10 charger delivered last year was a Subtech charger. And this survey was done throughout nine countries in Europe. And even if strong market for Subtech like Denmark and Switzerland is not a part of this survey, we still held this strong position in Europe. During the first quarter, there was installed more than 55,000 charging station throughout Europe. And this has increased by 18% compared to the first quarter last year.
And this rising installation rates reflect continued strong demand in the market. And this is important, because this secure that the charter we sell and deliver is not ending up as inventory in the distribution channels, but they are actually being installed at the end user. So this is laying the foundation for future growth for Subtech. We are ramping up the Subtech Go II and the Subtech Pro with certified MID and ICEWISCH for the German market. We have secured significant production capacity for these two new products.
As you can see, we have a slow ramping up of these products. And this is planned to secure that we deliver the high quality that we want to deliver out in the market. But you see that already in April, we have increased the production and increased even more now in May and June. And this higher production will have a positive impact on the financial results for the second quarter. Also want to take you through the numbers in the Benelux market for Subtech.
We have launched the GO II in the Benelux market. There was delivered some few units at the March. So this number is mainly the current products. And we see a really strong growth in The Benelux with 76% increase from the first quarter last year. And now with the up ramping of the GO II, we expect this strong growth to continue in the Benelux market for Subtech and we are gaining market share in that market.
Also in The UK, we have a strong growth with 54% growth from the first quarter last year. It’s still quite low numbers in The UK, but the most important in the first quarter was that we secured breakthrough contracts with key players in The UK. And this is set for accelerating the deliveries from the second quarter and we expect much higher numbers going forward in 2025 in The UK market for SUBTECH. And finally, in Germany, the biggest car market in Europe. Finally, we have a product market fit products for German market and start to deliver some few units in the March in the first quarter.
We managed to increase the sales in Germany by four times from the first quarter last year, small numbers, but with expanding through new and existing process in the German market, we expect much higher sales numbers going forward in 2025.
Erik Herem, CFO/Financial Presenter, Saabtec: Okay. So let’s look a bit more into our OpEx. We remain committed to drive innovation, sales and efficiency by having a controlled and sustainable OpEx level. As you can see on the graph, we spent NOK120 million in Q1 this year, which is a slight increase from Q1 last year. It’s worth noting that 5,000,000 out of these $120,000,000 was related to a one off cost because we had a reorganization, which led to a headcount reduction.
Moving ahead, we remain committed to drive scalability and to have OpEx at a controlled and sustainable level. And then I want to talk a bit more about our inventory. We delivered an additional reduction in the inventory in Q1 of million compared to the previous quarter. Overall, we have now reduced the inventory with over NOK 150,000,000 since the peak last summer. As illustrated in this graph, we have a plan to normalize the inventory in 2025 and we are on track to deliver on that normalization in the second half of the year.
Over to liquidity. We added million in net cash in Q1, bringing our total reserves of available liquidity to NOK327 million at the end of Q1. We do have a sound financing and liquidity situation to navigate future markets as we see it. And the NOK 300,000,000 overdraft facility with favorable terms, which we renegotiated last quarter, will help us in the future to navigate in an uncertain market.
Kurt Estrrem, CEO/Presenter, Saabtec: To summarize the first quarter, Saabtech’s KPIs improving further as we increased the revenue and the EBITDA. We have a strong order intake and a strong backlog and a huge visibility for future sales in 2025. We was named as the largest home charger provider in Europe. We have controlled the OpEx and focus on innovation and sales. We have reduced the inventory and improved our liquidity throughout the first quarter.
So the outlook for 2025 is that the EV market’s recovery is underway. Saabtech retain a strong position in core markets with momentum building in The Benelux, UK and Germany. We are ramping up production and delivering of new products targeting major European markets and we continue outlook for profitable growth. So based on the first quarter report and what we see into the second quarter, we still believe that 2025 will be all time high for Saptec. Thank you for following this presentation.
I’m looking forward to present the second quarter results for you in August. Also, I want to thank you all for following our journey.
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