Ariston Holding (ARIS) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues declined 14.4% year-over-year to €632M, reflecting normalization after last year's peak and ongoing destocking in key European heating markets.

• Adjusted EBIT for Q3 was €40M (6.3% margin), down 43.9% year-over-year, but margin improved by 200 bps sequentially from Q2 due to efficiency initiatives.

• Free cash flow turned positive in Q3, reaching €37M, and for the first nine months, positive free cash flow was achieved for the first time since IPO, driven by inventory reduction and CapEx optimization.

• Service and parts business remained resilient, with maintenance demand outpacing replacement.

Financial highlights

• Q3 2024 net revenues: €632M, down 14.4% year-over-year; 9M 2024 net revenues: €1,906M, down 16.7%.

• Q3 adjusted EBIT: €40M (6.3% margin), down 43.9% year-over-year; 9M adjusted EBIT: €97M (5.1% margin), down 56.4%.

• Q3 adjusted EBITDA: €68M (10.8% margin), down 29.7% year-over-year.

• Free cash flow for 9M 2024 improved to €14M from -€24M in 9M 2023.

• Net financial indebtedness at period end was €716M, up from €611M at year-end 2023, mainly due to dividends, Egypt plant acquisition, and share buyback.

Outlook and guidance

• 2024 is confirmed as a transition year, with organic revenue expected to decrease by 12–15% year-on-year.

• Adjusted EBIT margin for 2024 is guided at around 6%, reflecting lower revenues and labor cost inflation, partially offset by efficiency initiatives.

• Management expects some recovery from 2025, with midterm fundamentals seen as intact and mid-single-digit organic growth targeted.

• No irrational cost cuts or CapEx reductions planned that would jeopardize future growth.