- Americas and EMEA regions registered strong revenue growth for the company in H1 2023.
- Landis+Gyr shipped 10 million IoT devices in H1 2023.
- AI-driven grid-edge intelligence for localized decision-making is revolutionizing the utility sector.
Landis+Gyr, a leading global provider of integrated energy management solutions, achieved remarkable results in H1 2023. The company’s net revenue grew 33.2% YoY to reach an all-time high of $970.5 million. This robust revenue growth was driven by a strong focus on backlog execution and improved component availability.
Landis+Gyr CEO Werner Lieberherr, during the earnings call, discussed a few key topics like financial performance and management strategy going forward:
Financial performance and outlook
CEO Werner Lieberherr: “In the first half of the financial year 2023, we were able to demonstrate our ability to deliver continued strong growth and margin expansion. The steadily improving component availability and a strong focus on backlog execution drove growth and supported our ability to serve customer demand even better in the first half of the year. Continued strong order intake shows the trust our customers have in our solutions and underlines the recession-resilient nature of our company. As a result, we expect to deliver around the upper end of our margin guidance for the full year, assuming broadly unchanged global economic conditions.”
Counterpoint analyst take: A significant portion of Landis+Gyr’s revenue comes from a small number of key customers. This makes the company vulnerable to the impacts of change in demand. The metering market is highly competitive, with a number of large and well-established players. This can make it difficult for Landis+Gyr to maintain its market share. However, the company is addressing these concerns by continuously partnering with new customers and utilities to scale its solution and to be more competitive in this market.
CEO Werner Lieberherr: “Additionally, energy efficiency and grid resiliency are on top of mind as we are heading into winter. These factors, paired with our strategic transformation, provide a solid foundation for sustained profitable growth. The increased need for intelligence at the grid edge positions us in the sweet spot of the energy transition as we offer end-to-end solutions to our customers to manage energy better and drive the decarbonization of the grid.”
Counterpoint analyst take: Landis+Gyr has been a leader in innovation in the metering industry, with a strong track record of developing new products and solutions. This coupled with its wide range of metering solutions, including smart meters, grid-edge devices and software solutions, has helped the company to maintain its solid position in the metering industry. The acquisitions and investments in recent years, with a strong focus on high-growth opportunity areas, like a new comprehensive EV solution portfolio and flexibility management, will give Landis+Gyr over-proportional growth and make it resilient to recession.
H1 2023 result highlights and summary
- Landis+Gyr’s H1 2023 bill-to-book ratio was strong, reflecting the continuation of smart metering rollouts across major regions, conversion of backlogs with improved component availability, contract wins across regions and strong demand. The company’s revenue and other financial parameters improved due to the growth in its residential load management software and services and meter data management system solutions.
- Landis+Gyr shipped 10 million IoT devices in H1 2023, an increase of 38% YoY. This will also help to strengthen the installed base for future software revenues.
- The company had a solid order intake of $958.1 million, an increase of 22.5% in H1 2023, driven by sustained strong order intake, including major contract wins in the Americas and Europe, Middle East & Africa (EMEA) regions. However, the total backlog for the period rose 7.2% YoY to reach a high of $3,730.5 million on supply chain constraints.
- In H1 2023, the Americas region delivered exceptionally strong net revenue growth of 44.2% YoY to reach $564.8 million driven by strong backlog conversion.
- The business in the EMEA region also grew significantly with net revenue increasing 29.7% in constant currency terms to reach $321.6 million driven by the Switzerland and France markets and the Luna business in Turkey, offsetting the softening in the UK market.
- Net revenue from the Asia-Pacific region declined 5.5% to $84.1 million due to the discontinuation of manufacturing activities in India, which was partially offset by its strong performance in Hong Kong.
- In America, Landis+Gyr’s key product launches in H1 included the Series 5 M125 residential gas retrofit modules, which offer enhanced meter reading capabilities and tamper sensors, and the rollout of the Revelo application developer kit to the developer community to enable increased software offerings.
- In the EMEA region, the next-generation grid meter family debuted with the introduction of the E860. The company also launched an analytics platform offering essential insights for grid operations, with the inaugural power quality cloud customers now active. Besides, it unveiled a new residential EV charging platform, targeting a new market segment.
- The acquisition of Thundergrid, a comprehensive EV infrastructure services firm, enhances the company’s EV solutions for the APAC region.
- Landis+Gyr consistently achieves positive revenue growth through significant contracts in smart metering, grid edge intelligence and smart infrastructure. The rising importance of AI-driven grid-edge intelligence for localized decision-making is revolutionizing the utility sector. This prompts the company to prioritize a ‘SaaS-first’ strategy across products, targeting recurring revenues.
- The other players in the ecosystem are also struggling to meet customer demand due to various supply chain challenges and global economic uncertainties. Landis+Gyr is not an exception, but we expect conditions to improve by the close of 2023.
- Landis+Gyr is set to benefit with its large and diversified customer base, including utilities, grid operators, and commercial and industrial customers, and a strong global presence. However, it has to tackle some challenges like price competitiveness. Landis+Gyr offers superior products but faces increasing price pressure from its competitors. This can make it difficult for the company to increase its margins.
- The strong order intake indicates a favorable market environment and an increased need for more intelligent power grids. This will drive energy efficiency and ensure critical infrastructure stability.