Brunel International (BRNL) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 revenue was €338.6 million, down 1% year-over-year (2% organically), with gross profit down 8% and underlying EBIT at €17.3 million, down 8% YoY.

• Year-to-date revenue reached €1,030.3 million, up 4% (5% organically), but gross profit fell 3% and underlying EBIT dropped 7%.

• Cost reduction program executed in Q3 will reduce annual costs by €20 million, with €8.5 million realized this year and operating costs reduced 8% YoY.

• Free cash flow for the first nine months reached €36.1 million, mainly from improved client collections.

• CEO transition completed; search for new CFO ongoing, and EGM scheduled for 25 November 2024 to appoint a new Supervisory Board member.

Financial highlights

• Q3 gross margin declined to 19.8% from 21.4% YoY; YTD gross margin at 19.5%.

• EBIT margin for Q3 was 5.1%, with YTD EBIT margin at 4.1% (2023: 4.6%).

• Q3 earnings per share fell to €0.13 (down 48%); YTD EPS at €0.43 (down 24%).

• Net cash balance as of 30 September 2024 was €21.5 million, with €14.6 million restricted.

• YTD EBIT/gross profit conversion ratio at 21.1% (target >32%).

Outlook and guidance

• Downward trend in the DACH automotive sector and project delays in Asia expected to further impact Q4.

• Strong project pipeline, especially in Asia, with most new projects expected to start in early 2024 or Q1 2025.

• EBIT percentage expected to improve next year, supported by cost agility and margin focus.

• High single-digit revenue growth targeted for 2024, with optimism for a return to growth in renewables and other sectors.

• Management remains confident in meeting long-term targets due to strategic positioning and cost base optimization.