Carel Industries (CRL) H1 2024 earnings summary

Executive summary

• H1 2024 revenues were €291.5 million, down 11.7% year-over-year, mainly due to EMEA weakness from heat pump declines and soft refrigeration demand, with North and South America showing strong growth.

• EBITDA margin was 18.3%, down from 22% in H1 2023, reflecting negative operating leverage despite improved gross profit from lower raw material costs.

• Net profit fell 30.9% to €27.8 million, with a tax rate of about 23%.

• Revenue decline was driven by tough comparables from backlog recovery and supply chain normalization.

• Gradual improvement is expected in H2 2024, with full-year revenues guided near €600 million.

Financial highlights

• Revenues declined 11.7% year-over-year to €291.5 million; organic revenues dropped €52 million, partially offset by €13.4 million from perimeter changes (notably Kiona).

• EBITDA was €53.2 million, down 26.7% year-over-year, representing 18.3% of sales.

• Net profit was €27.8 million, down from €40.3 million in H1 2023.

• CapEx rose 64.6% to €13 million, mainly for R&D and plant expansion.

• Net financial position at period end was negative €101.6 million, impacted by M&A, CapEx, working capital, and dividends.

Outlook and guidance

• Gradual improvement expected in H2 2024, with Q3 revenues projected close to Q2 and full-year revenues near €600 million.

• No significant recovery in EMEA heat pumps expected before late 2024 or early 2025; other verticals' stock levels are near normalization.

• Medium-term outlook remains positive, especially for North America, driven by variable-speed compressor technology and natural refrigerants.

• Full-year EBITDA margin expected to remain around current levels, with Q4 typically weaker but offset by stronger sales.

• Energy efficiency and sustainable refrigerants remain strategic priorities.