Ariston Holding (ARIS) H1 2024 earnings summary

Executive summary

• Q2 and H1 2024 saw the weakest European heating demand in decades, with net revenues down 16.5–17% year-over-year, driven by sharp declines in heat pump volumes and the deconsolidation of the Russian subsidiary.

• Adjusted EBIT margin in Q2 was 4.3%, down over 65% year-over-year, and H1 adjusted EBIT was €57 million, a 62–63% decrease.

• Free cash flow improved in Q2 to €27 million, supported by inventory reduction and CapEx optimization, though H1 free cash flow remained negative.

• The Russian business was deconsolidated after a government decree, resulting in a €45.7–46 million impairment.

• Management expects 2024 to be a bottom year, with a gradual U-shaped recovery anticipated from 2025 and a positive mid-term outlook.

Financial highlights

• Q2 2024 revenues were €621 million, down 17% year-over-year; H1 2024 revenues were €1,274–1,274.4 million, down 15.5–16.5%.

• Adjusted EBITDA for H1 was €113.2 million (8.9% margin), down 44–45% year-over-year.

• H1 reported net loss was €31.9–32.0 million, compared to a profit of over €100 million in H1 2023; adjusted net profit was €29.2 million.

• Free cash flow in Q2 was €27 million, up from €6 million in Q2 2023; H1 free cash flow improved to -€23.9 million from -€30.3 million.

• Net financial indebtedness increased to €687.5–721 million as of June 30, 2024.

Outlook and guidance

• 2024 revenue is expected to decrease by 12–15% year-over-year on a like-for-like basis, with adjusted EBIT margin guided at around 6%.

• No immediate market recovery is expected; H2 demand remains weak, with gradual recovery anticipated from 2025.

• Mid-term fundamentals remain intact, with expectations of mid-single-digit organic growth and adjusted EBIT margin above 10%.

• Enhanced cost containment and efficiency initiatives are expected to deliver €70–80 million impact in 2024.

• Focus remains on brand strengthening, operational efficiency, and investments in renewables and digitalization.