Carel Industries (CRL) Q1 2025 earnings summary

Executive summary

• Q1 2025 marked a return to revenue growth (+0.7% YoY to €147.4 million) after four quarters of decline, driven by strong Data Center momentum in the US and a rebound in European Refrigeration, despite earlier supply chain constraints now resolved.

• Adjusted EBITDA margin improved to 18.6%, supported by effective procurement, lower raw material costs, and digital services expansion; reported EBITDA margin was 18.1%.

• Net profit declined 38.7% to €10.1 million, mainly due to the absence of prior year’s extraordinary accounting gains and negative FX effects.

• Net debt reduced to €43.9 million (down from €50.2 million at FY 2024), or €13.1 million excluding IFRS 16, reflecting strong cash generation.

• Order backlog is strongly growing, supporting a positive outlook for the coming quarters.

Financial highlights

• Revenues grew 0.7% year-over-year to €147.4 million, with all regions except Asia-Pacific contributing to growth; constant FX growth was 0.1%.

• Adjusted EBITDA rose 2.1% to €27.4 million (18.6% of sales), up from 18.3% last year.

• Net profit fell to €10.1 million from €16.5 million, mainly due to non-recurring items in Q1 2024.

• Capex was €4.4 million, down year-over-year, with full-year capex expected at ~5% of sales.

• Net working capital improved by €6 million compared to Q1 2024.

Outlook and guidance

• Q2 2025 revenue expected to grow high single-digit to low double-digit percent year-over-year, supported by a strong order book and positive market trends.

• Asia-Pacific expected to return to growth as project timing normalizes and new products ramp up.

• Refrigeration and data centers anticipated to drive further growth, with positive trends in EMEA and North America.

• Profitability expected to remain in the 19-20% EBITDA margin range if high single-digit growth is achieved.

• Guidance does not factor in potential negative geopolitical developments.