Hello everyone, welcome to the Q1 financial report of Guideline Geo. My name is Malin Siberg, and I'm the CEO of the company.
I am Jonas Nordstrand, I'm the CFO of the company.
We will walk you through the Q1 report. We will start with a brief introduction to the company. Then we will end up with the financial details. If you have any questions along the way, please type them into the chat. We will respond to them in the end of this session. Guideline Geo, what do we do? We map and model what is below the surface. We can map and model what is just below the surface down to 1,000 meter. We use nondestructive geophysical methods. That means that you don't have to drill, you don't have to dig. Our systems are used from the surface. There are many applications where customer use our instruments and solutions. The three core ones and the three growth applications are groundwater.
Finding new groundwater, monitoring groundwater levels, monitoring groundwater for pollution or saltwater intrusion or leakage from dams. Groundwater applications go very deep into bedrock, but can also be very, very shallow and up close to the surface. Another core application is ground investigations. Whatever you want to build, if it's a bridge, a road, a skyscraper, an offshore windmill park, you need to know the ground stability, the bedrock stability, and the quality of it. This is driven by the infrastructure sector. Our third core application is utility locating. Utility locating is finding pipes, cables, wires, fibers before you put your excavator to work. Knowing where to dig is key here.
Utility locating application is a growth sector. It's driven by the digitization of the building construction and infrastructure sector, where you want to connect the digital model of what's above the surface. We help provide a digital model of what is below the surface. We also see more and more regulation being adopted in this sector for more and more countries. Our customers are both contractors, specifically for utility locating, also consultants, technical consultants and geophysical specialist consultants. We also see governments and regional authorities, such as water departments worldwide using our equipment. A strong sector is also universities, is a growing area. If that is what we do, who are we? We are listed on First North Growth Market. We are on a growth path.
Last year, we had a strong net sales of SEK 173, and we also did a financial turnaround, as you can see in the numbers. With the size of the company, we have a very global reach through both a direct sales and support, but also indirect through a distribution partners worldwide. We are made in Sweden. We have R&D and manufacture in Sweden, and our roots are from the mining sector up north in Sweden. This year, we celebrate 100 years. Our solutions include four different geophysical technologies. GPR, ground penetrating radar, TEM, Transient electromagnetics, ResIP, Resistivity and Induced Polarization, and Seismics. This makes us unique in the industry. We are the only ones that carry these four technologies in one company.
Sometimes they are used separately, in many case, they are used as complementary technologies to solve the customer problems. We have two market-leading brands, ABEM and MALÅ. ABEM, an application, one of the core growth applications for ABEM is groundwater prospecting, groundwater monitoring. One core and growth application for MALÅ is utility locating. There are many applications where there's a combination of both, such as ground investigations, as an example. Now we will move into the Q1, we will start with the financials. We had a very strong quarter, as you can see in the table on the right-hand side of the screen. We had a very strong order intake and a strong net sales. Our EBIT and cash flow was both positive and according to our plan for this year.
We are especially glad for these numbers because Q1 is historically a pretty weak quarter for our industry and for our company. This makes the Q1 numbers even stronger. If you look specifically on the net sales and order intake, on the tables to the right-hand side of the screen, you can see that we are on a growth path. We have a strong trend. If you look at Q1 specifically, the growth came from EMEA and from APAC. That grew very strong for us.
The growth came from both the ABEM product line and the MALÅ product line. We saw specific strong growth in our two volume products on ABEM and MALÅ. We saw growth both in the public and the private sector, which is nice to see in this more turbulent financial environment that we are currently in. If you look at the brand, the split of sales between the brands, we can typically see that we have equally important brands in our ABEM and MALÅ. We saw strong growth for both brands if you compare Q1 to Q1 last year. If we move our eyes to our applications, one of the growth application I talked about for ABEM was, is water prospecting, anything with groundwater. As you can see, we have a very strong and positive grow trend here.
The Terrameter LS2, that is our largest ABEM product, volume product for us. A Q1 highlight here is that we got two large orders from universities in China during Q1. They're going to use our systems to detect dam leakages, as well as detect pollution in the water from landfills. two typical applications for groundwater using our LS2s. I'm also glad to see that China is opening up again after being so closed down for us last year because of COVID. We also see a very strong interest and multiple orders during Q1 for water prospecting in Africa because of the drought that we see specifically in Western Africa.
If we move our eyes to the applications that is highly relevant for our MALÅ brand, utility locating, we can see that also here we see a strong trend. Easy Locator Core is our volume product and our largest MALÅ product that was released end of 2021, so you can only see two years' Q1s here. A Q1 highlight that I want to mention for the EL Core is that we got our first order to a rental business in the U.K., GAP Group. We see this as strategically important to us because we see that as a third step in market adoption for using geophysical instruments in utility locating. Typically, we see market adoption for GPR in utility locating in a new country that we first sell single sales of our instruments.
As a second adoption rate, we see multiple sales to larger customers. This is now when we see for the first time that our end users start a rental business because they see a growing need of new users that want to rent our systems for a certain time period and project. In Q1, we have focused on sales channel development in all three regions. In APAC, we did a change in Japan and India, redirecting our sales team from direct sales to more sales channel development, building a distribution partner network. In EMEA, we added a business developer to do exactly the same thing, focusing on finding the right distribution partner where we have our weak spots throughout Europe.
In Americas, where we go more direct in North America, we've added direct sales in a region where we wanted to see more activity. If you look at our profitability, our EBIT, we are according to plan. As you can see, we have done a financial turnaround, both if you look Q1 to Q1 and if you compare full years' numbers to full year numbers. The reason behind the financial turnaround on EBIT is our sales growth. We have grown into our custom, and that makes us profitable. We have also addressed the contribution margin in many ways, and we as a result, we see the contribution margin has moved up. As part of one action to do that is, of course, the yearly price list update that was done during Q1.
On the negative side, we also see that inflation and increased cost of components, transportation services, as well as personnel has impacted EBIT in a more negative way. All in all, we've done a financial turnaround, and we are on a good trend. Part of our strategy is, of course, around innovation. Innovation is a core element in our company. In Q1, we launched three new products, which was according to plan. The first thing is a software update to our ABEM Terrameter LS2 that we call Active Guidance, guiding users in the field to be more effective in the field.
The second one is also for the ABEM brand, a power adapter that helps customer be more efficient in the field and use our instruments in the field in a better way. On the MALÅ brand, we launched a new software version with improved features to help customers in the field. We also launched an innovation concept that we called Autonomous GPR, which is the first time in the industry that we show that we can, GPR can be autonomous. In January, we also joined and started an EU-funded research project called AgroSense, where we are the selected partner for GPR. GPR data into the forestry and agro sector.
As part of our strategy is to do a transition to a stronger business focus throughout the company. In Q1, we I want to highlight a few examples where we did that through people and organization, as well as through process and execution. In January, we appointed a new global sales director in the company, who's also the current president of Americas. We reorganized our product management function to move product management a bit closer to sales and marketing and the customers. On the process side, we, as I mentioned, worked quite hard on the sales channel development, making sure we have the right sales channels in the right regions. We implemented portfolio management together with a new product management function with more increased business perspective.
As sales grow, we also improved our way of sales forecasting to make sure that manufacturing has insight to what is being sold so that we can deliver on our growth. We, yesterday, we sent out communication around new long-term financial targets for profitable and sustainable growth. We published long-term financial targets and updates strategy around how to get there. Our targets are a yearly double-digit net sales growth. As a comparison, last year, we grew with 22%. To continuously improve EBIT and reach 8% latest 2027, and as a reference, last year, we had an EBIT of 4.0%. Positive and growing cash flow every year, and as a reference, last year was SEK 6.4 million in cash flow. We also have an ambition to carry out acquisitions in line with the company strategy.
With that, I will hand over to Jonas to go through the financials.
Thank you. We're gonna look at the net sales, and we have the right net sales year-to-date, full year. We had the net sales for the quarter. In America, it went to SEK 13.1 million compared to last year, SEK 13.6 million. That was a very strong sale compared to 2021. Sales for EMEA went up to SEK 20.4 million compared to last year, SEK 12.5 million. The APAC grew to SEK 12.2 million compared to last year, SEK 10.5 million. The Q1 profitability and EBIT, the operating profit, was SEK 1.7 million compared to last year, -SEK 0.7 million. The operating margin was positive 3.8% compared to last year, negative 1.9%.
The net profit, SEK 1.1 million compared to -SEK 0.6 million , and earnings per share, SEK 0.09 compared to a -SEK 0.05. The financial behinds is that we had a positive exchange rate. We also reduced or we had finalized a couple of development projects during, compared to last year. We will increase that depreciation when we launch new, have bigger launches. The personnel expenses are always higher in the Q1 due to bonus payments. Also we have an increase in the personnel. We grew with two more people. The operating cash flow was SEK 3.8 million this quarter compared to SEK 10.3 million . The investment in investment activities was - SEK 2.1 million compared to -SEK 2.6 million last year.
The net cash flow was SEK 1.7 million compared to SEK 7.7 million , 2022. What was the numbers behind that? Yeah. In Q1 2022, we had a very high sales due to a launch of Easy Locator Core. That was in Q3 2021. We also have higher short-term liabilities. We did sell a lot and we had higher short-term liabilities compared to this year, we are more, like, stable. Malin?
Thank you. We're getting to the end of this session, I wanted to end with the key takeaways from this Q1 report. We saw a really strong order intake and net sales in Q1. We had positive EBIT and cash flow, which was according to our plan for the year. We are strategically transitioning to a stronger business focus in the company. We have published long-term financial targets for Guideline Geo. Thank you for listening. Now we will take any questions if there are any questions from the chat.
Yes. First question we have here is that we see that last year was a strong year, and Q1 has been strong. Could you say anything about how Q2 looks?
Of course, I can't provide numbers for Q2, but I can tell you what we sent out in a press release. We're happy to say that we got a large ABEM order for LS2s to Pakistan. Pakistan Water Department has evaluated our system and selected Guideline Geo and ABEM for mapping and monitoring water groundwater throughout Pakistan.
We also have a question about our business in the Western United States, and especially the Pacific Coast of the United States. It seems like our technology in regards to finding groundwater would be something requested, especially by these states, and that there are major investments being done. How are we acting to make sure that we can win these opportunities?
Yes. That is a very important questions. We have re-redirected part of our sales team to actually go investigate and go sell into the western part of the U.S. where we have not been as strong as in the other parts of North America. We are re-redirecting our sales efforts to also include more focus on Western California. There are many areas in the world where we see a growing need for water prospecting. The world is unfortunately getting drier and drier because of climate change. In Western United States is, of course, one region that we look into. We have the solutions for it.
We just need to make sure that we have the right, sales attention to it, and we did some redirection of repurposing of our team, during Q1.
Can you comment a bit on the business model or strategy for after-sales or recurring revenue and service in general, and especially for the ABEM brand?
Yeah, after-sales and software sales is both a growth driver for us. Software is a growth driver. After-sales is growing because of our numbers. We have a service center in Charleston that used to do only MALÅ service, but have since almost a year back, also doing service on the ABEM side. That is the way that we move out our service and after-sales business closer to customers step-by-step when we see a need to it. There's definitely room for growth in both our after-sales market and in our software and software is driving growth as by itself.
Can you please comment on the revenue growth in EMEA? What drove that revenue growth?
We saw really strong growth in EMEA. I think we, last year, we invested in more sales people in EMEA. That is coming into effect. We also in last Q, last year, we hired a new sales manager for the region that has also helped drive sales in a more systematic way. We are always working with our distribution partners throughout EMEA and changing when we see a need to that. A lot of sales focus on EMEA. The market growth is there. We are growing with the market. We are taking market share. All right.
I think that's all questions for today.
Okay. Thank you very much for attending. If you have any more follow-up questions, please don't hesitate to reach out to any of us. Thank you.