Hello, welcome to the Q3 report from Guideline Geo. My name is Malin Siberg, and I'm the CEO of the company.
Good morning. My name is Jonas Nordstrand. I'm the CFO of Guideline Geo.
We will start with a brief introduction to the company, then move over to the Q3 report. Before starting, we will encourage you to type in any questions you may have in the chat, we will respond to them in the Q&A session in the end. In the Q2 session, we shut down this before some of your questions were being entered, we will try to respond to them today. Please type your questions throughout the presentation so we won't miss any of your questions. As I said, we'll start with a brief introduction to the company and what we do. Guideline Geo, we map and we model what is below the surface. We can map from very directly under the surface down to approximately 1,000 m down below. We do this by using non-destructive geophysical methods.
You can use our methods and our instruments in many applications, but our main and core and growth applications are groundwater management. We can find groundwater, we can help monitor groundwater basins, we can help monitor for saltwater intrusion or pollution in your groundwater worldwide. Another growth application is ground investigations. Ground investigations is whatever you want to build. If it's a skyscraper, it's a subway, it's a tunnel, it's a road, it's a bridge, you need to understand your ground. Where bedrock is, the quality of bedrock. If you have quicksand or quick clay as we had in Stenungsund, you need to understand to build safe, reliable, and efficiently. Our third core application is utility locating. Utility locating is all about finding pipes and cables underground to make sure that you have a digital model of everything that is connected underground.
Our customers are both private and public. For utility locating as an example, contractors and consultants are our end users and our customers. For groundwater management, governments are the main end customer for us, and we also have customers in academia and in research. If that is what we do, this picture shows who we are. Guideline Geo is listed on Nasdaq, on First North Growth Market, and we are on a growth path. Last year's numbers, we had SEK 173 million in revenue. It was the year when we turned positive to SEK 7 million EBIT, and we had a positive cash flow. We are a truly global company, and we have a global reach through our direct and our indirect sales and support channels that you can see as dots on the map. We are a Swedish tech company. We are made in Sweden.
We have R&D in Umeå, we have manufacturing in Malå in Västerbotten up north in Sweden. We celebrate 100 years. We actually had our 100 years birthday yesterday. We use four different geophysical technologies to solve our customer problems. We use GPR. It's ground-penetrating radar. It's like radar you're used to, but we send our signals into the ground. We have TEM, transient electromagnetic fields that we send into the ground, we have resistivity, where we measure conductivity in the ground, and we use seismics, where we apply shock to the surface and measure seismic waves. We go to market under two market leading brands, ABEM and MALÅ. We will come to that a little bit later in the presentation. Now we move over to the Q3 report.
If you follow Business Sweden's export index, describing how Swedish export companies do, you can see that some struggle today in the macro and turbulent world that we live in. We don't. We're excited to show you our Q3 numbers. It is a record quarter for us. We're excited to walk you through our numbers and give you some insights and analysis what's behind the numbers. Q3, it is a record quarter. If we start with EBIT, our Q3 EBIT exceeded the full year EBIT last year. We ended the quarter with SEK 8.4 million, which is 17% of the net sales. We also continue to see a strong order intake in the quarter, +1 9% compared to last year's quarter in Q3. We also have a solid and strong net sales and cash flow, which is according to our plan for the year.
If you look at year- to- date, Q1 to Q3, we are even more satisfied to see the continued strong order intake for the company. We're + 30% compared to the same period last year. Our EBIT is strong. It's 11.9%, which is 9% of the revenue. It is a record quarter if we deep dive a little bit into the EBIT. As I said, SEK 8.4 for the quarter and SEK 11.9 for year-to-date numbers. The reason for the strengthened EBIT is partly, and I've talked about this before, that we have grown into our cost base. We've had a pretty large cost base, and now it suits us in the size that we are. Of course, we also have some positive tailwind from this weak Swedish krona. There is a currency effect, but it's not that large as it used to be, and it's becoming lower and lower.
The main thing that has made this trend change that you can see in the pictures below on the right side, is that we have worked really actively on product portfolio management to improve our margins. What I mean with that is that we have a large product portfolio. We are a 100-year company. We have discontinued non-profitable product lines. We have worked on our cost side to help make sure that our COGS do not go up in the same rate as inflation. We have worked on our bundling of our products to make sure that our margins are okay, as well as our pricing on our volume products. Many small activities have led to this change of trend in EBIT, and that we have a really active management of our product portfolio, and I am proud to see these numbers. If we move our eyes to order intake instead.
The Q3 order intake was +19%, and what drives this growth in Q3 was specifically a strong order intake from Americas and from APAC. We also see a very strong order intake in the water management in the water sector for us. In Q3, we did a major product launch that we call MIRA Compact that I will come back to a little bit later in the presentation. That also gave us a bump in order intake for Q3. That is on the GPR side. It is also satisfying to see that we see strong order intake, both from the public and from the private sectors. In this turbulent environment, that is very sound to see.
If you look at year-to-date numbers, we are up +30% in our order intake, and that really shows us that we are continuing on this really strong growth path that we have been for the last years. We can continue to see that we see strong growth in all three regions. We see good growth on both the ABEM product line and on the MALÅ product lines. Our main products are driving our order intake growth. If we move to net sales, we can see that Q3 grew with 16% compared to last Q3, and year- to- date is +9%. As you can see, there is a slight discrepancy between order intake and net sales, which means that we have a growing backlog. The main reason for our growing backlog is the launch of the MALÅ MIRA Compact that we did in September.
Again, I will come back to that. If you are looking at the split between ABEM and MALÅ product lines quarterly, we continue to see that we have two strong brands and product lines, and they both grow for us. You can see in the last quarter that we had a somewhat out of the ordinary large sale of what is called Other. For those that follow us, might remember that in June, we sent a press release that we got a very large order from a mining customer in North America for an installation of a slope stability monitoring system for open pit monitoring. Now it is delivered according to plan in Q3, and hence we see the revenue bump in Other. I talked about the water sector, water management, and we are continuing to see a strong growth in this area.
In this field, we have our best-selling ABEM product, the Terrameter LS 2. If you look at that product specifically, year- to- date, we've grown with 48% from last year's Q1 - Q3. If you just compare Q3 to Q3, it's even much higher growth. I want to highlight specifically that in Q3, we got large orders and several orders from different countries throughout Latin America. The same goes for APAC. We see strong growth in the water sector in APAC. We have a couple of sales also in Germany that we are pleased to see. Interesting is also that the metrics that I show you is for the LS 2, which is a resistivity instrument that we go to market under the brand name ABEM. We are starting to see a growing demand also for our TEM solutions, and the product is called ABEM WalkTEM 2.
Resistivity and TEM is really complementary technologies targeting the water sector. I'm really pleased to see the growth also for our TEM solutions in the water segment. We are also continuing our work to develop our sales channel, our partner network. In APAC, in June, we signed a new distributor in India, Pan-India, and we really see a strong start from this new distributor throughout India for both our product lines, and we're starting to see strong sales. In EMEA, in October, we signed a new distributor for our MALÅ product line, and that's been a gap for us in Germany. We're really happy to have that signed. In France, in June, we signed a new distributor for our MALÅ a distributor called [Agen]. We're now starting to see a lot of sales activities and the first sales coming from this new distributor.
That's also very pleasing to see. In Americas, we see a very strong sales throughout Latin America, and we see a very strong development of our distribution partners throughout Latin America. Part of the reason is that from earlier this year, we refocused one of our internal salespeople to focus fully on working with the distributors throughout Latin America. This is now starting to show really strong result for us. Now we're moving on to the innovation strategy, and we will show you a short video about a Q3 highlight, which is when we launched a new solution that we call the MIRA Compact. The MIRA Compact is a large-scale 3D GPR mapping solution that is very compact in its format.
This new solution targets specifically the utility locating market, as you can see in the video below, where you can find pipes and cables in the ground. We also target ground investigations with this solution. It can be anything from archaeology, or it can be road mapping to find potholes below the ground, as we had in the E4 on the way to Arlanda last week. Proactively finding potholes below the road. This solution includes the MIRA Compact that you can see in the video, the instrument itself, but it also includes two of our own developed softwares. The MIRA Controller, which is our data acquisition software, and the MALÅ Vision Desktop, which is the software used for data processing and visualization of what you see and find subsurface. This solution targets a pretty well-established market.
This is not the first instrument that we take to market that is targeting this market. Competition is also launching similar type of solutions for this growing market segment. We know that we have unique selling points, which is why we are very confident in this new product. In all our GPR solutions, we have market-leading data quality, and this will be true also for this new solution. We are best in class for our workflow focus. We have a seamless and intuitive workflow, that is very much due to our software solutions, that it's intuitive, this will open up for new type of users that don't have to be a physicist to use these type of solutions. The third unique selling point is the usability.
It's market leading, it's very compact in size, is very easy to use, it really allows you to have a fast and efficient coverage of your survey. We did an internal launch of the MIRA Compact in June when we had our partner network partners over in sunny Stockholm. In September, we did the external launch to our end users. In Q4, we plan our first shipments. In the map, you see our planned shipments to our own sales channel, our partner network, as well as to our end users. We are very satisfied with this launch, and we believe it's been really successful. Now I will hand over to Jonas to give you some more financial details around Q3.
Thank you, Malin. This quarter EBIT was a new record, and what's also interesting, it's the sixth consecutive quarter with positive EBIT since 2022. The EBIT in Q3 was strong due to strong sales and strong margins. The net sales per region was up in Americas by 28% compared to same period last year, zero. APAC was up 23% compared to last year, 40%. EMEA was - 1%, compared to 41%. The year-to-date numbers, all three regions went up. Americas up 11% compared to 28% last year. APAC up 5% compared to 35% last year. EMEA up 13% compared to 55% last year. The cash flow for the Q3 was stable due to strong sales, was SEK 8.2 compared to last year same quarter, SEK 8.5, on the year- to- date was SEK 10.3 compared to SEK 2.8.
Also, since we have both higher and stronger sales during the year, it has given more operating cash flow. The investment activities has went up due to the MIRA Compact release, this was up from SEK 2 million in Q3 2023, up to SEK 4.2, on the year-to-date numbers, it's SEK 12.1. The net cash flow for the quarter is SEK 4.1 compared to SEK 6.5 million. On the year-to-date numbers is SEK -1.8 compared to SEK -1.9 same time last year. We still have quite good cash, is SEK 16.5 million at the present. Over to you, Malin.
Thank you. To summarize, the key takeaways from this Q3 report from Guideline Geo is that we had a record quarter. EBIT and order intake exceeded our expectations and is a record for us. We see strong growth in the water management sector. We did a successful product launch with the MIRA Compact that we have high expectations for going forward. We are on a sound pace. We are strategically transitioning to a stronger business focus in the company. We can see the result of that in this Q3 report. With that, we close this session and move over to a Q&A.
Malin, let's start with the questions that we couldn't answer last time. Have you been able to increase the price in line with inflation and higher COGS?
As I started to talk about, we have really worked hard on our portfolio management. We have increased prices, but not to the extent as inflation, because we also worked on the COGS side and on the bundling side. We have discontinued non-profitable product lines. We've worked on the portfolio management to reach. We see higher margins than we used to, and it's depending on many different factors.
Malin, what level of sales can you manage with the organization we have today?
I think you've seen our growth numbers. We haven't added people, we have grown into our cost base. We are confident that we will be able to continue to grow without increasing our cost base to the same extent. There is still efficiency gains to find. If I take an example in how I think we can grow sales without adding people, is that if you look at Latin America specifically, we're very strong on the ABEM product line, but not as strong on the MALÅ side. To do that, we don't need to add people. It's more to make sure that we focus on both product lines. The same goes for APAC. We're very strong on the MALÅ side, but not as strong as on the ABEM side, the same rationale and the same thinking goes here.
I think we have a good cost base. We plan to grow without growing our cost base to the same extent. Of course, growth needs some investment, but not to the same extent as our growth plans.
Thank you. Jonas, what is included in the higher investment cost and the increased development projects that was added up to the increased cost that we saw?
Pretty much everything is on the MIRA Compact. That's what we'll say. We have the launch, we have the shipment in Q4, I think we're going to close it as soon as we start with the first shipments. It will be stable. Within this portfolio group, we will decide what the next product will be. We'll see. We'll come back to that.
It's important to say that MIRA Compact is both the hardware projects, the software projects. It's the solution that is behind the R&D investment that we've done.
Malin, good job on all the points and especially on the operating margin. What do you think about the operating margin in the future for the fourth quarter and beyond?
It's hard for me to comment on future numbers, we are on a good path, and we are doing continuous work of managing our portfolio to make sure that we stay on a sound contribution margin. I don't see a risk in our margin.
Jonas, can you talk a bit about how you expect the cash flow seasonality to develop in the future? Will the first half be negative?
Oh, that's a good question. It's quite hard to answer it. I would say it depends a lot of both how the sales develops and also it depends on how much we need to do investment, both in inventories, stocks, also how the cash flow from the payments from customers will develop. I won't give an answer on that, more than that.
Malin, are you looking at any inorganic growth opportunities?
We've showed our financial targets before, in that, we have an ambition to also look for acquisitions. That's part of our strategy. That's a continuous work to look for and find suitable candidates. Whenever I have something to talk about, I'll do that, of course. If you have any more questions, we're happy to take them, either now in this call or you can always reach out to me or Jonas after this call, and we'll be happy to answer any questions you may have. If there are no more questions coming through the chat, we look forward to seeing you again next quarter. Thank you for listening, and thanks for your interest in Guideline Geo.
Thank you.