Good morning. My name is Pasi Hiedanpää. I am the Director of Investor Relations and Communications at Scanfil . This is Scanfil's Q2 results webcast, and together with me here is our CEO, Mr. Christophe Sut, and CFO, Mr. Kai Valo. As usual, type in your questions to the chat box window, and we will take all the questions at the end of the presentation. Now, handing over to Christophe, please.
Thank you, Pasi. Good morning to all of you. Pleased to spend an hour with you this morning to walk you through Scanfil's performance and activities during Q2. Let's get started. A few key events we wanted to select for the quarter. The first two are related to driving our organic growth, and in that perspective, it was a very active quarter. We had a few new sizes of businesses that we acquired during the quarter. Taking the first one, I think we were very pleased with the contract we had with Liquid Instruments that will do full outsourcing to Scanfil. Very pleased for many reasons. It's in the heart of what we want to grow: medtech and life science. It's a contract we acquired for our new operation in Australia, and from that perspective, it shows the first element of success on the development of SRXGlobal. Very pleasing.
We had a few other wins: Amazon, you have seen, and Freemelt that we have communicated about before. At the same time, we have seen traction on a few markets and have continued our expansion plan. We announced early in the quarter the expansion of our capabilities in the U.S., where we will add the second assembly line for electronics manufacturing, and that is now under progress. We also completed the implementation of our first modern assembly line in our newly acquired entity in Malaysia, which we will actually inaugurate with our customers in a couple of weeks from now since we will have a big opening 2nd of September with key customers. As you can see, the quarter was full of events that are here to drive our organic growth long term. At the same time, we continue on our acquisitive agenda and did two very strategic acquisitions.
The first one that we announced in June was ADCO in the U.S. ADCO is a perfect complement to our operation in Atlanta. It gives us additional capacity, a new customer portfolio with strong presence in aerospace and defense, but also capabilities in rapid prototyping that we were missing in the U.S. and that our customer really will appreciate. We have already interest to visit that operation as soon as the closing is done. Very positive. During the weekend and earlier in the week, we have been commenting on the acquisition of MB Elettronica that we signed during the weekend. It is a significant step for Scanfil.
It gives us a footprint in South Europe that is a very big market for our type of industry, but also gave us a significant footprint in aerospace and defense with more than 37% of the revenue of that company towards those customers. As you can see, a lot of activities driving Scanfil for the future, both organically and through acquisition. If we look now at the numbers and the performance of our operation during the quarter, I believe we had a solid performance during the quarter. The revenue at EUR 202.2 million was growing 3.4%. Still slightly negative organic, -1.1%, but incremental growth versus the previous quarter. We can see now that we are gaining speed and momentum, and that was seen in our sales. As a consequence of it, we got back to solid performance.
Our EBITDA was at EUR 14.2 million, 7%, which was a solid quarter from that perspective. We continue to win new deals with EUR 41.7 million of deals that were won during the quarter. Very active in industry, energy cleantech, medtech, and life science. The energy cleantech was maybe a bit slower in acquiring new businesses, but we can see now already positive signs on seeing that segment recovering in sales, and that was the good news for the quarter. The APAC and the American region were enjoying still a very strong momentum. I mean, we have seen that for quite a few quarters and still continue to see a very positive development there, which was positive. Finally, as I mentioned, I mean, we had the effect of an increase of volume, our EBITDA margin moving from 6.5% in the first quarter to 7% in the second quarter.
All in all, I will say it was good news on the customer side with good development there, acquisition of new contracts. It was also a good development in the profitability of the company. Earning per share was at EUR 0.16 in the quarter. As you can see on the revenue and EBITDA trend, I mean, you can see that the revenue is getting back to a higher level. It was already significantly higher than the first quarter and following the projection we have for 2025. In that perspective, the good surprise of the quarter was that it was not a surprise, but executed according to plan. The same goes for EBITDA. That was also increasing from the previous quarter, a solid EUR 14.2 million. That gave us a positive trajectory looking at the months forward.
If now we look at the different regions, America reached EUR 11.8 million, which was a record high number, 7.2% profitability, which was also in the range of what we expect from our different operations. I mean, we have in America a strong customer demand, especially for electronics manufacturing. That's the reason why we have actually both announced the investment in a second line, but also decided for the acquisition of ADCO. We have a very positive view on the American market in our sector, and it was again shown in the performance of the region during the quarter. The APAC region was also developing in a good way, a bit north of EUR 59 million in revenue during the quarter with an improving profitability, and there we appreciate the trend.
We were now back to a level of 8.6% EBITDA, which is trending up the last three quarters, as you can see here. It was driven by a very strong performance and strong demand on the Chinese market, which resulted in strong performance of our Chinese operation, but also a very solid performance in Australia, where we also have a very positive outlook with the new acquired customer that I mentioned a little bit earlier today. We have a high level of ambition for our Malaysian operation, and I think that now that we have completed the implementation of the investment, we can look forward at that facility also in a positive way. Very, very, very happy with what is going on in the APAC region and very proud about the work that has been achieved there.
Looking at Central Europe, as I mentioned in the previous report, Central Europe has a very big impact from the energy and cleantech segment. The energy cleantech segment in the quarter was still pretty flattish in a way, and here the revenue was landed at EUR 67 million with a profitability that was well defended by the team at 7.3%. The positive element is that we can see that this market, and mainly the project market here, is showing a positive line for the second part of the year. That was the positive news or positive confirmation in the quarter, which was something that we were expecting. I would say a good development and a solid performance based on the current volume and an outlook that is more positive for our Central Europe region. Northern Europe was also in the range of EUR 65 million with 5.7%.
Here, it's a bit of a mixed bag. I mean, we had businesses that are a bit challenged when in the same times on revenue, defense is driving revenue up, which has a positive impact on the global. Therefore, I will say the overall profitability was slightly below the expectation we have for regions, but still improving from the previous period. We also know that in a way, our Northern Europe region has also a cleantech, energy and cleantech customer portfolio in it that will drive forward performance. When we look at the customer split, I mean, the quarter was very active for our biggest customer.
Our biggest customer weighted 14% in the quarter, and our first 10 customers were in the range of 58% for the second quarter of the year, which shows in a way the strong partnership we have developed with those key customers and the positive development and implementation in their NPI. That was very much in line with what we were expecting. If we look at industrial, industrial had a positive rebound in the quarter, both versus the previous quarter, but also versus previous last year when we had an increase of revenue of almost 9%. We had also a very active number of formed deals that totalized about EUR 25 million. A few drivers in that, obviously, aerospace and defense there is helping and driving growth significantly, and also new contracts are coming in. I mean, we had several contracts.
They are not always super sizable, but they are impacting the overall at the end. Here you have two different customers that brought a bit more than a million during the quarter in new contracts for aerospace and defense. Energy and cleantech was still a bit, as I mentioned before, a bit sluggish, slightly negative, -4.4% versus last year in the quarter with EUR 64 million. The warm deals were 12.1%, which was still driven by a few good customers who are driving growth, and that was a positive element. As I mentioned before, we have a positive outlook on that segment for the second part of the year. It has been suffering last year and stabilizing, but we have seen signs of return. Customers that disappeared last year because of the stocking are now coming back.
What we expect in the second quarter is that project business will be in the second part of the year, is that the project business will be driving the return of that segment. Even if the third quarter was still a bit sluggish, I think that the outlook for the end of the year is better. Medtech and life science continue to grow. It was 4.4% growth against the same quarter last year for that customer group and continued to show a positive traction for many of our customers. We have also a very strong pipeline on that segment with a very important number of customers. A lot of activities also to improve our operation and factories to serve those customers better. We continue our journey there, and it's a very positive development, I believe, mainly looking at the pipeline and the opportunities we have forward.
With that, I will hand over to Kai for the financials.
Thank you and good morning. First, we'll look at the EBITDA development April-June comparing to the previous year, same time. On the right side, you can see the EBITDA Q2: EUR 14.2 million and 7%, and on the left side is EUR 14.3 million last year and 7.3%. Very steep line, almost flat in value-wise and small decline in terms of margin. Revenue was ended EUR 202 million. There was an increase of EUR 6.7 million in the revenue. That was including around EUR 9 million of revenue of SRX, and organically, the growth was slightly negative, 1% down. Overall, 3.4% increase in the revenue. This is exactly the same share as we have a growth in the expenses. The expenses are well under control and also included the SRX expenses. Depreciations increased by EUR 600,000.
Half of that is coming from SRX investment, and then the other half is our investments for the future growth, what we are preparing for. Same view for the first half. On the right side, this year, EUR 26.8 million of EBITDA and 6.8%, and on the left side, EUR 27.4 million previous year, same time, and 6.9%. Margin-wise, flat almost, and there is EUR 600,000 drop in the value resulting from the Q1. Turnover total, EUR 395 million, flat year-on-year. There is a slight increase in the production volume because we were building a big inventory of EUR 1 million finished goods, and expenses growing EUR 600,000. Totally in line, a bit less than what the volume I expected. Same with the depreciation, that EUR 1.3 million increase in the depreciation, which half is for the future growth and half coming from SRX acquisition.
Strong financial position, balance sheet in good shape, total value EUR 535 million. Inventories were declining EUR 26 million year-on-year. Good result. Goodwill is higher, EUR 20 million resulting SRX acquisition. Cash, EUR 12 million more in the pocket. Fixed asset resulting SRX acquisition higher by nearly EUR 10 million, EUR 8 million. Interest bearing debt slightly lower, paid off some portion of the loans. Equity per share was EUR 4.4. Cash flow continued very positive, EUR 23 million in the quarter and EUR 34 million in the first half. Inventory improvement continued a bit lower pace than it used to do the last one and a half year. EUR 5 million decline in the inventories, cash flow impact, however, good result. Free cash flow, EUR 17.8 million in the quarter, which is then actually higher than dividends we paid, EUR 15 million. EUR 27 million in the first half in total.
Looking at the past, cash flow from the operations generated in the last two and a half years is amounting totally nearly EUR 200 million or EUR 190 million in total. Net debt, good development, continued EUR 14.3 million if considering the leasing liabilities. We are negative in the net debt. It's a little bit higher than it was in Q3 last year after the acquisition of SRX. We are almost like neutralized that impact. Cash and debts were already mentioned, but we have made two new financing agreements during the first half of the year, totaling EUR 100 million available liquidity. Now we are ending up in total value of nearly EUR 250 million, including the previous available credit limits plus the new agreements of EUR 100 million. The cash in hands, EUR 50 million. Net debt, 0.19 in comparing to EBITDA. Finally, the key figures.
Equity ratio is more or less the same as last year. Equity is higher, on the other hand, and also the total balance sheet value is higher, which is then lowering the percent slightly. Net gearing with a lower net debt and higher equity is very, very low. Return on equity, with higher equity value, we are declining with the return on equity, and this could be expected to improve over time with the organic and inorganic growth. Earnings per share, more or less, on at the level of last year. Thank you. I will hand over back to Christophe. Oh, sorry, I have still maybe not the probably one of the most important points. They have a dividend growth already 12 years in a row, EUR 0.24 paid for 2024. It's 6x higher than what we did in 2012, 12 years ago. Nice development there.
One-third of the net profit is a target in average to pay out as a dividend. Now, we'll transfer to Christophe.
Thank you, Kai. Before going through your questions, when it comes to our outlook, we remain with the same guidance that we have given previously. The reason for that is, as I said, the business has unfolded very much the way we were seeing it, and I think the signs we have remain in line with our previous estimate of the business. From our perspective, the way forward, we will obviously focus on closing the two M&A that we have signed the last couple of weeks, which is important in the agenda. Also, in parallel, we continue to drive organic growth. We have a quite significant amount of activity, both in building capabilities and in customer acquisition to return to a higher level of growth. That is something that is focused looking going forward.
At the same time, we need to keep control of our costs and keep control of our inventory, where we believe there is still room for improvement. We will continue that journey. We have been successful in it the last 18 months, but we believe that there is still room for improvement on inventory control. With that, maybe to mention, we will have an investor and media visit on the 16th and 17th of September in Sierras. It will be the opportunity to meet that site. That is an important site for Scanfil. With that, I think we can move to Q&A, Pasi.
Yes. You can see on your screen a chat box window, so please type in your questions there, and I will read those questions here and post those to you. Christophe, Kai, I know that many people are still on vacation, but let's wait for a while.
There have been a few questions, maybe update the.
There are a lot of questions. All right. Exploring defense, how is the remaining segments in industrial developing?
Yeah. On the industrial side, I mean, obviously, the industrial segment, the way we report it today, includes defense. I will say that obviously, defense is the driver of the growth. That's definite. We also see a few businesses that are coming back to a good level. I mean, if you look at our number, you can see, for example, that Asia and America, in today's number, are developing very positively. They are developing very positively, mainly driven by the industrial segment. I will say it's not only defense that was driving the good performance. It's also all the customers that were returning to more positive growth.
Thank you. Jacob continues about volumes. Taking price into consideration, what was the underlying organic volume development in the quarter?
I think that's something we should get back to, maybe back to Jacob.
Within energy and cleantech, how are the different end markets developing, some better or worse than others in energy and cleantech? I think that we have been mentioning project business already earlier.
Yeah. I think that energy and cleantech, I mean, it's an interesting dynamic because we have actually won a lot of business in that segment over the last 18 months. That is starting to ramp up. In the same time, it has been a stocking effect. We can see two elements. We can see that the more regular business is starting to move up forward slightly. On the forecast and the outlook, we have a very positive potential development of the project business to come.
Okay. Thank you. Now, Mr. [Riku Hynninen], all your business orders were in 2024, EUR 187.5 million. Can you estimate what was the amount of turnover from these orders during the first half of the year this far? The estimates ask.
Can you take it once more, maybe?
All new business orders were EUR 187.5 million in 2024. Jorki is asking how much of those EUR 187.5 million came in in the first half of this year.
Yeah. I will say it's still quite minimal. I will say today, you could probably count on 20%-25% of it as materialized in revenue. The biggest part of it is still to come forward. What you should consider is that the ramp-up time is 6 months- 18 months to start manufacturing of a wind contract. Therefore, you will realize that very little of what was won in Q4 is already in manufacturing. After that, you need sometimes to get full speed in production, but also in the customer placing the order. I would say it's still a minimal part of it that is getting consumed yet.
Questions continue around the organic growth and how do we maintain it and how do we see it. Organic growth has been negative, discounts from [Pasi and from Monodia] for many quarters. Is the organic growth going to be a positive figure already in Q3 2025?
I think that we have been facing a trend in the industry that has been the stocking, and I would say it's no surprise to any of you since you have been following us. We believe Q3 and Q4 will mark return to positive organic growth, absolutely.
Yes. Thank you. Jacob continues about MB. If MB Elettronica s.r.l. is to meet the requirements for the earnout payment, will this consideration to be paid only in 2027? By or.
It will be paid in 2026, and then part of that will then be realized paid in 2027.
Thank you. Pasi, from Nordea, has there been any direct or indirect effect for Scanfil in Q2 from trade war?
Yeah. I mean, there is impact in the sense that we have a lot of quotes that are requested from our U.S. operations. I will say the activity of customers that are considering locating their business in the U.S. is actually quite significant. As you know, a big chunk of our business is to produce where it's getting consumed. It has not created big movements in our manufacturing. It's more creating opportunities for us to ramp up production in America.
Thank you. Continuing about the global trade, on different interests. Now that customers have had more time to adapt to the uncertainty related to global trade rules, have you seen any changes during Q2 in the six to nine months demand forecast they have provided to you, or in their behavior in general?
No, I would say, first of all, I would say that probably for many customers, there is still uncertainty on what will happen and how this will unfold at the end of the day. We have not seen any dramatic change. In reality, I was mentioning that Q1, and it's also true for Q2, in a way, this year is a more stable year than previous year was, even if it can look like it's a more turbulent time. I think that, as I also mentioned before, things have happened pretty much the way we thought they will happen, and therefore, pretty much the way the customer told that it will happen.
Okay. Thank you. Hunter continues about the SRX, actually. Could you comment on the performance of the former SRX units during the first nine months at Scanfil? Yeah. Can you elaborate a bit?
I think that it has been a very interesting journey, first because it was a long time since Scanfil made an acquisition and also because it offered us capability. I think it has been pleasing in many ways. First, in the quality of the collaboration between the team, which has been good, but also in the dynamic of the business. I mean, I was mentioning before, if I look at Australia, we have had an incremental positive development from Australian operation, which was this quarter better than the previous one and better than the one before. Also, new customer acquisition. I mean, I mentioned one of them today, which is also a very good sign. We were very pleased with that. That was a very positive element. When it comes to Malaysia, it's a little bit longer-term journey, but we also validated the first step.
The first step was to, in a way, modernize the operation and the factory. I was quite pleased. We'll be there in a couple of weeks, but quite pleased to hear our Regional VP, Christina, that was telling me now we have a small Sut in Malaysia, and I'm looking forward to that. In a way, it's happening the way we were hoping it to happen, which is positive.
Okay. Thank you. Just a sec. I'll check if there are other questions coming in. I want to still have a question regarding the earnout related to SRX and the probability and at what level we anticipate that we will come up with. Are you heading to pay earnout closer to lower or upper end of the potential range?
Yeah. I would say we always hope that the best case scenario is the one that materializes. I mean, business can give different outcomes. We are only at half of the year, so there are still many things to happen. As I said, it has functioned quite well, and we have a positive outlook to the rest of the year. It is still to be seen what it will mean in terms of earnout. Small changes can have a big impact for the seller.
Thank you. All right. Let's wait for a bit. Still, there are further questions coming in. Seems that no questions. Christophe, to the closing remarks. Thank you.
Thank you, Pasi. Thanks for listening. A few takeaways from this quarter. As I said, turnover is gaining speed, and we were now growing 3.4% versus last year. We see a business pipeline remaining very strong, and it allows us to deliver a level of EBITDA in a good level with 7%. For the future, we have, as I mentioned before, activities to continue to build our growth. The first are related to the acquisition where we need to close our acquisition. At the same time, we have won deals that we will now have to continue to work and implement. I will say that the positive part in the quarter was really we managed to combine in a good way our strategic activities organically and our strategic activities around M&A, which is what we said we're going to do 18 months ago.
From that perspective, things are in line and supported by a strong balance sheet where we continue to make improvement. We make significant improvement in our inventory reduction, and I believe that it's something that will move forward and will continue to improve during the whole 2025. With that, I thank you for listening to us today and wish you a good summer for those, some of you going to vacation.