Order book returns to growth

discoverIE’s Q325 update confirmed that it continues to see a gradual improvement in the trading environment, with the order book up 4% q-o-q and book-to-bill of 1.01x for Q325. The company remains on track to deliver FY25 underlying earnings in line with the board’s expectations. Various Magnetics & Controls customers continued to work down inventory and, consequently, organic revenue was 3% lower y-o-y at constant exchange rates (CER). We have trimmed our revenue and EBIT forecasts, resulting in underlying diluted EPS reductions of 0.7% in FY25 and 1.2% in FY26. In our view, positive design win activity combined with good cash management positions the company well to benefit as markets recover.