Cabka (CABKA) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 declined by 11% year-over-year to €92.3 million, mainly due to intentional price reductions and weakness in U.S. Customized Solutions and Contract Manufacturing.

• Gross margin improved by 4 percentage points to 50.5%, attributed to operational effectiveness, automation, and higher value-add products.

• EBITDA margin dropped to 11.3% from 12.9% last year, with EBITDA at €10.4 million, impacted by lower sales and inflationary cost pressures.

• Net income for H1 2024 was a loss of €1.9 million, compared to a profit in H1 2023.

• New CEO appointed, focusing on innovation, sustainable growth, and strategic realignment, with a Capital Markets Day scheduled for November 25.

Financial highlights

• Revenue fell from €104.3 million to €92.3 million year-over-year, with a 5% top-line impact from price adjustments.

• Volume grew by 15% in performing segments, indicating market share gains despite overall revenue decline.

• Net debt increased to €74 million including operational leases; net debt at €56.8 million as of HY2024 excluding leases.

• Capital investments reduced to €9.3 million, focused on automation, maintenance, and U.S. restoration.

• Net working capital at 20% of sales, reflecting inventory buildup and longer payment terms for new customers.

Outlook and guidance

• Full-year 2024 revenue guidance revised to €180–185 million, down from prior expectations.

• EBITDA margin expected to recover to 13–15% (€23–27 million) by year-end.

• U.S. Customized Solutions and Contract Manufacturing expected to remain under pressure; other segments to continue growth.

• Medium-term guidance targets high single-digit revenue growth and EBITDA margin toward 17% by 2026.

• Dividend of €0.15 per share to be paid on August 16, 2024.