Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Basler AG (XTER:BSL) is making consistent progress on bookings and billings, with a 10% increase in bookings and a 14% increase in billings from Q1 to Q2.
• The company has improved its gross profit margin by approximately 1.5 percentage points to 48.1% compared to the first half of last year.
• Restructuring efforts are paying off, with Basler AG achieving a pretax profit of EUR1.3 million in the second quarter.
• The company has reduced its workforce by approximately 240 full-time equivalents, optimizing its team structure.
• Basler AG continues to innovate, introducing new products such as 3D Stereo products and expanding its portfolio with non-visible 2-dimensional products.

Negative Points

• Basler AG is operating in a weak market environment with low demand across all regions, impacting its top line.
• The company's billings were down 20% in the first half of 2024, closely aligning with the market's decline.
• Despite improvements, Basler AG is still experiencing losses, with a EUR2.3 million loss in the first half of the year.
• The company faces high competitive intensity, particularly in China and Asia Pacific, due to aggressive competition and weak market demand.
• Basler AG has narrowed its sales guidance to the lower half of its previous range, indicating slower than anticipated market recovery.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with XTER:BSL.

Q: Can you provide more details on the market environment and its impact on Basler's performance? A: Hardy Mehl, CFO and COO, explained that the market environment in the first half of the year was weak across all regions, with slight improvements in Asia. The demand for consumer electronics remains particularly low, affecting overall performance. However, there are signs of recovery in logistics and semiconductor applications. Inventory levels are high but decreasing, which is expected to gradually improve demand.

Q: How has Basler's restructuring impacted its financial performance? A: Hardy Mehl noted that the restructuring has been beneficial, with improvements in key parameters. Although bookings and billings were down compared to last year, they have shown sequential growth. The gross profit margin improved by 1.5 percentage points to 48.1%, and the company achieved a positive pretax earnings of EUR1.3 million in Q2, despite a loss of EUR2.3 million for the first half.

Q: What are the strategic investments Basler has made recently? A: Basler has invested in Roboception, a Munich-based company specializing in robotic vision, acquiring a 25.1% stake. This investment aligns with Basler's strategy to transition from a component-focused company to a full-line provider in computer vision, enhancing its capabilities in various vertical markets.

Q: Can you elaborate on Basler's regional sales performance? A: Asia accounted for 49% of total sales in the first half, showing faster growth compared to other regions. EMEA contributed 35%, while the Americas remained weak at 16%. The company anticipates that a recovery in semiconductor and consumer electronics markets will boost Asian sales further.

Q: What is Basler's outlook for the remainder of the year and beyond? A: Basler expects a gradual market recovery, particularly in Q4, and has narrowed its sales guidance to EUR190 million to EUR200 million, with a pretax earnings margin of 0% to 3%. For the midterm, Basler aims to achieve EUR300 million in sales by 2027, with a 12% earnings margin, contingent on market recovery and access to the China market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.