Welcome to our Q2 report. This is Malin Siberg, and I am the CEO of Guideline Geo. We are your guide to the subsurface. We use non-destructive geophysical methods to find what is subsurface down to roughly 1,000 meters below. We serve the infrastructure market and the groundwater sector with our solutions. To be very brief about Guideline Geo as a company, we are listed on NASDAQ First North Growth Market. We are just a bit more than 100 years old as a company. We have a true global reach through our indirect sales channels, the green dots on the map that represent 65% of our sales, and the orange dots where we have our own subsidiaries in our own offices where we do a bit more of direct sales. We go to market under two market-leading brands. It's MALÅ and ABEM.
Let's turn our focus and our eyes to the Q2 numbers. If I summarize where we are, we've seen a strong first half of 2025. If we start by looking at the Q2 numbers, we saw stable net sales of SEK 44 million and a stable order intake of SEK 47.6 million. We had a positive EBITDA and negative EBIT. We had a slim but positive operating cash flow and a solid net cash. We have SEK 20.9 million in net cash. If we compare Q2 2025 to last year's Q2, the comparison numbers of sales are down. We are a pretty small company and a large order that we got in Q2 last year of SEK 8 million makes the impact, the change between a very good quarter and a weaker or more stable quarter. We try to look longer term.
That is why I also always use year-to-date numbers. This quarter, we look at half-year numbers. If we look at half-year numbers, we are on a good trend. We see an 8.8% sales growth, 8.3% order intake growth compared to last year's first half year. We are on a positive EBITDA, and that is despite the dramatic change in currency effect that we've seen the first half year. Currency impacted our EBITDA with -SEK 4.3 million the first half year compared to last year's where we had a tailwind of SEK 1.2 million directly impacting our profitability. When I summarize the first half year, we have a strong operating cash flow with +SEK 11 million for the first six months.
If we look at sales and order intake and the split per, I want to share with you some highlights around what market and applications have shown good results in Q2 and also the split in regions. If we start by looking at the markets, for those of you that follow us, last year I talked about the weak infrastructure market and the weak utility locating sector. I can now say that it has bounced back. We've seen strong sales towards this sector in the quarter and in the full half year. If I look specifically on utility locating, we can see strong sales in our large markets for this application in the U.S. and in the UK. It's really good to see a good bounce back. It's also promising to see that we sell our utility locating solutions to 14 countries throughout Q2.
That is a strong sign that we're not only dependent on a few larger markets. There is growth potential here. In the quarter, we've also sold a couple of systems for road scanning. We've seen this request specifically from Asia, and this quarter we got order from Korea. The customers want to use GPR attached to a vehicle and to do mobile road scanning to detect cavities or cracks or potholes for preventive maintenance of roads. That's a highlight sale in Q2. We've also seen a growing interest and sales to the defense sector. They want to use GPR for finding mines subsurface, demining, or finding, detecting unexploded ordnance subsurface. We've seen requests and orders from both Europe and from Asia throughout the second quarter. If you look at the tables on the bottom of the slide, you can see the sales split and the order intake split by region.
As you can see, we are on a very strong and good trend within the Asia-Pacific region. For this specific quarter, we saw strong sales development in Korea, in India, and Australia. You can also see that we've seen a weak development of EMEA, our region EMEA, in the quarter. This quarter, it was specifically EMEA that has been weaker, weaker than earlier. One of the reasons being that we sense the shutdown of U.S. aid, that has had ripple effects into NGO and UN-funded investment throughout Africa. That has affected our sales to the water sector, specifically in EMEA and specifically in Africa. You can see a strong trend in Americas, and I'm glad to see that we really bounced back on MALÅ, specifically in the U.S. That is despite the tariff situation that I will come back to a little bit later in the presentation.
I talked about the strong sales trend that we see in APAC. Part of APAC is Oceania and Australia. I wanted to show you the impact that we've seen in terms of sales from the acquisition that we did, acquiring our MALÅ distributor in Australia. We completed that acquisition in January 2024, and you can see half-year sales numbers. Obviously, prior to the acquisition, it was a distributor, so we saw distributor sales. After the acquisition, we expected a bounce because we got the end customer sales into our books. Nevertheless, quarter by quarter, since the acquisition, we have seen a sales growth in Australia that is really pleasing to see. In the pie chart on top, you can see the result from broadening our offering to our customers in Oceania. As I said, we acquired our MALÅ distributor. They sold only MALÅ.
Now you can see when we summarize the first six months that 12% sales come from ABEM. We are starting to see traction and see the potential of ABEM sales throughout this region. Within other, it's both some third-party solutions, but it's also a result of our assisted rentals and our consultant services as a way to showcase our customers using our solutions in the field. Eighteen months in, I would summarize this as being a very successful acquisition that has given more results than we expected. If we look at the sales split by ABEM and MALÅ, our two product lines, the Q2 highlight is that we continue to see strong MALÅ quarter in Q2, growth in the MALÅ segment. This is driven by both our 2D and our 3D solutions.
The 2D targeting the utility locating market has grown with a strong growth of our Easy Locator Core, our volume product, but also strong growth in our 3D, our array solutions. I've talked about the Mira Compact, our most recent big product that continues to grow in importance for us. Within the MALÅ segment, we've also seen a growth in our aftermarket sector. We have a lot of active customers. We've had an initiative, and we're starting to see that by accessories or upgrades or trainings, so we can see a growth in our aftermarket sales. From a region perspective, the sales growth in MALÅ comes from North America and from Asia-Pacific. If you look at ABEM, we've seen a weaker quarter. As I said, EMEA was a specifically weak quarter, and that is the groundwater sector.
I want to highlight something from Q2 is that we have seen from the engineering market that typically use many of our methods, many of our products. We call them multi-method customers. We've seen a growing interest in our seismic solutions that are often combined with our GPR or resistivity or our TEM methods. Good to see a growing interest here. If we turn our eyes to profitability, you can see quarter by quarter on top, the EBITDA numbers, and on the bottom, the EBIT numbers. I usually talk about the seasonal effect because there is a seasonal effect in our industry. Our customers typically do more service in the warmer part of the year, and a lot of our sales are driven by tender processes, and they have a tendency of being more active by the end of the year.
We have a seasonal effect that typically gives a result of higher sales end of the year and a weaker first half of the year. As our cost base is pretty much intact, that gives a weaker profitability in the first half of years. That's our historical data. We, of course, track every product margin, and I'm glad to say that we still see solid product margins. It's hard work to maintain those when we see currency fluctuations, when we see tariffs, and I'll come back to that a little bit. We still see overall solid product margins if I look at the entire portfolio. Obviously, with these negative EBIT numbers, we have very tight and continued tight cost control to make sure that we don't overspend going forward. I talked about the tariffs in Q2. When we imported to the U.S. to sell to our U.S.
customers, we had a 10% tariff on everything that we imported. From August, that tariff has been raised to 15% on what we import to the U.S. So far, we've been pretty successful in transferring tariff costs to the end customer. It's not always possible, but that's our ambition. Let's see how that turns out when the bar is raised even more. Currency fluctuations, we sell mainly in U.S. dollars, but also in euros and Australian dollars. Our supply chain and the majority of our team, our salaries are in Swedish Krona. With this really rapid development of strengthening of the Swedish Krona towards these three currencies, in Q2, we've still faced a headwind of minus 0.7 million this quarter. If I look at the full first half of the year, it's -SEK 4.3 million versus a tailwind of -SEK 1.2 million that we had last year's first six months.
This is, of course, affecting our profitability. Due to this rapid change, strengthening of the Swedish Krona we did a second price list revision in July this year. We typically do it once a year, but because of this, we did a second one starting from July as a way to safeguard and protect our product margin on a healthy level. If we talk cash flow, we had a positive cash flow, not large numbers, but still positive. I'm even more happy about the net cash situation that we worked very hard on. We continue to bring stock levels down, not as much as earlier quarters that I talked about this, but still they continue down. Also, a good Q1 has, and we're getting paid from our customers, makes that when we closed Q2, we had SEK 20.9 million in net cash plus SEK 10 million in an unused check credit.
From our perspective, this is healthy, this is sound. I talked about the weakened sales in EMEA, a trend that we've seen. We sell most through our distributors in Europe and in the Middle East and Africa. In Q1, I talked about the regional conferences that we did, and one of them was for EMEA. In June, we held the fourth partner conference, regional partner conference, and this time we've gathered our European partners in Stockholm for an event. We do this because we need to get the feedback directly from those that meet customers every day to make sure that we understand their needs, understand what products sell, what markets sell, where we see potential and where we don't. We do sales training, we do product training, we do product demo trainings.
We share between the team customer cases and best practices, and we push and push for growing the sales. It's also about building relations. Good, strong relations with our partners turn into stronger sales development. This is not the only thing we do to change the trend. We've also, we could also welcome five new partners from this year to EMEA region. As an example, we added where we saw blind spots. We used to sell direct in Sweden, our home country, but we added a partner, Trimtech. Sweden is a long country, a large country. Trimtech has five offices throughout Sweden, and we think this is a way to really strengthen sales in Sweden.
Some of the other new partners are, some of them are new to cover white spots where we had direct sales before, but it's also a replacement where we have not had a successful collaboration with a partner. We replace and start up fresh with the new. It's a combination. We continue to invest in product development. This quarter, we launched a couple of new products to our existing customers, to the aftermarket, such as accessories and upgrades. The most wanted one was the one you see in the picture with the Volvo. It's to make the Mira Compact product mobile. We call it the tow hitch carrier, which means that you can attach the Mira Compact new product to a car to do faster mobile measurements using this latest new technology. Software-wise, we continue to invest in software, get more and more users of our software.
Launch this quarter was a real-time inversion software for our TEM solutions that the customer can see in field that they got the data that they were looking for and the correct data already in the field to make sure they don't return home with faulty data. We also did numerous feature releases, requested features on our MALÅ Vision platform that is being used more and more by our GPR customers. We also launched one new instrument model to our GroundTEM series, where with this new instrument, customers can go deeper to search for groundwater, which is important in some parts of the world. A highlight from this quarter within our sustainability focus is that we participated in June in the Nordic UN procurement seminar in Copenhagen.
We do see quite a significant part of our ABEM sales, the groundwater sales, going through the UN or being financed by the World Bank. We want to be a competent partner to the UN and their different organizations and be relevant to them and understand what their needs are. This is the fourth time that we participated in this event. It's a biannual event. We've been working closely with this for the last eight years. This time, we were invited by the Minister of International Development and Foreign Trade to discuss what Sweden can do more within the water sector and what we can do more to help. It's really important for us to work closely with these types of organizations.
At the AGM meeting, we got a new board, and I brought up this slide to you to show that we have a new Chairman of the Board, Stina Flugell. She's been on the board since two years back, and now she is appointed a new Chairman. She's replacing Anders Genfors, who's been our Chairman since eight years back. He remains on the board for continuity and making sure that transition is smooth and easy. He is now also our main shareholder in the company. A good transition of our chairmanship. Key takeaways from this quarter are that the first half of this year has started strong for us. We continue to invest a lot of time and money into building the industry-leading partner network, filling the gaps or replacing where we need fresh eyes on specific markets.
We continue to invest in innovation, and it resulted in a couple of really important product launches in Q2. Last but not least, we are a true export company. As such, we are very much exposed to currency changes and to import taxes. We have a strong belief, I have a strong belief, that our global sales make us strong and make us somewhat resilient to these macro environmental turbulence that we are currently in. With that, I hand over to Anders to see if we have any questions from the chat.
Yes, first question. EMEA keeps going down. Could you elaborate a little bit more around this?
Yes, we've been on a downward trend in EMEA. Different reasons, different years, I would say. Last year, I talked a lot about the weak infrastructure and building construction market that we saw in Sweden. We saw it all across Europe. That really hit our MALÅ sales. That year, we saw pretty okay sales in ABEM. If we only go on, we don't run in all cylinders. That was a weaker year for us. If we look at this year, it's the opposite. We've seen when U.S. aid was shut down, it had ripple effects on the NGOs. Orders within the water sector in Africa, Middle East, Latin America were postponed, pushed forward. Our ABEM sales in EMEA are down. We're starting to see a bounce back within the infrastructure and building construction market in Europe. It's not all the way back in place yet.
We still have an opportunity to get stronger. ABEM is the problem area in EMEA so far this year. We are, of course, addressing this. At our partner conferences, specifically for EMEA, specifically for Europe, our change of partners or adding partners is our way to solve it. We're not adding a lot of more salespeople. Our indirect sales is our approach to get back on growth numbers for EMEA. We've done some internal shift of sales management for Europe and Middle East and Africa as well. Many activities in parallel to get back on track.
What has the reaction been from customers on the two price increases that we've seen this year?
I think it's been, we're not the only one raising prices. I think many of our regions have seen the inflation, have seen the turbulence around tariffs. I think there is more understanding and acceptance about price increases than a more normal year. Of course, we've seen questions and some pushback as well. We saw that necessary to maintain healthy margins. We think it's the right thing to do this year.
Do the price increases in July take into account both the weakening of the Swedish Krona and the higher tariffs?
No, it's separate. The price increase in July was specifically targeting the currency, the rapid strengthening of the Swedish krona. The tariff is only for the U.S. Our U.S. dollar price list is worldwide, so the tariff is handled specifically for our sales in North America, specifically for those orders.
EBIT has been negative two quarters now. Can you explain a little bit more about your depreciations?
Yeah, I think if you look back from January 1st, 2024, is when we took a jump in depreciation. It's because two things happened. We acquired MALÅ, our distributor in Australia, and started to depreciate that. We also launched and started to ship and sell the Mira Compact, which was a large R&D project that we started to depreciate. Those things, if you look back from Q1 2024, it was a big change in depreciation numbers.
On that topic, is this something we now should take into account moving forward, expecting weaker EBITs?
I think looking, it's always to predict the future. The only thing I can talk about is historical data. Looking back, we can see year over year that our first half of every year is weaker than the second half in terms of sales because of the season that customers are doing more service during the summer period and not in the winter period, also driven by the tender processes. We have to sell a lot to authorities and universities that have a tendency of doing the tenders by the end of the year. That is historical data. I see no reason that that should change. Our cost structure is pretty much flat over the years. We have the same people, we have the same offices, we have the same cost of goods.
Looking back, the first half of the year is always weaker from a profitability and sales perspective than the second. That's what my data tells me.
Could there be significant tenders and contracts this year like the one we saw last year in Tanzania?
Last year's large SEK 8 million order to Tanzania was our largest ever within this company. That was a very large one in our world. We have large tenders more in between SEK 2 million-SEK 5 million. That is a large tender, and they happen from time to time. I can't predict exactly when they happen, but we see those coming from time to time. We've done that in the past and we expect that to continue.
You mentioned defense and demining. Can you explain a little bit more about this market?
Yes. The defense sector has over a long period of time evaluated if GPR can be a complementary technology to help search for mines subsurface or unexploded ordnance. In this turbulent geopolitical situation with Ukraine and Gaza and instability worldwide, we have seen an increased number of requests and orders within this field to try out how GPR can complement existing demining solutions to help demine risky areas worldwide. Lately, we've seen requests both from Asia and from Europe.
How confident are you in reaching your 2027 EBIT target?
I think with all long-term financial targets, it's an ambition. You plan for it. Expected and unexpected things happen. Of course, that is our ambition, and that is what we are working for. How confident I am, I think that I'll keep that to myself.
What does the company need in order to achieve more stability in terms of profitability and maintain a positive EBIT every quarter?
To have a stable profitability quarter by quarter, I think we need to get up at an overall higher profitability level. That is our long-term strategy to increase our profitability numbers. That's very high up on our agenda. It will not be the same even quarter by quarter. We are still a pretty small company, and with a seasonal impact, we will have, we can't change the cost between the first half and second half of the year because we have the cost structure there. It is pretty much impacted with how much sales we get. The sales margin and the cost structure do not vary as much as sales between quarter to quarter. I think the most important thing is that we have in our plans, in our ambition to increase our profitability longer term.
That was the last question.
All right. Thank you for listening in and see you in this setting in one quarter.