ElringKlinger (ZIL2) Q3 2024 earnings summary

Executive summary

• Transformation strategy SHAPE30 is advancing, focusing on product portfolio optimization, divestment of non-core assets, and ramp-up in fuel cell and battery technology, including EKPO's NM20 stack launch and new projects in Europe.

• Divestment of two subsidiaries in Switzerland and the U.S. (10% of 2023 sales) to Certina Group, signed in October 2024 and expected to close by year-end, is margin accretive mid-term.

• E-mobility and battery business units are expanding, with significant revenue growth and new production facilities in the U.S. and Germany.

Financial highlights

• Q3 2024 order intake rose 28% year-over-year to EUR 481 million; order backlog up 0.8% nominally, 3.9% currency-adjusted.

• Q3 2024 sales revenue at EUR 441 million, down 2.4% year-over-year, but organic sales up 0.1% in a weak market.

• EBITDA improved 7.3% year-over-year to EUR 51.2 million; Adjusted EBIT at EUR 23 million (5.2% margin).

• Net income attributable to shareholders at EUR -56 million in Q3, with EPS at EUR -0.89, impacted by EUR 58.1 million in non-cash impairments from divestments.

• CapEx in Q3 was EUR 18.6 million, investment ratio at 4.2%.

Outlook and guidance

• 2024 revenue expected slightly below previous year in organic terms; positive operating free cash flow anticipated, around 2% of revenue.

• Adjusted EBIT margin guidance of around 5% for 2024 reaffirmed.

• ROCE expected significantly below prior year, forecasted at around 6% due to impairments.

• Market environment remains challenging with weak demand for EVs and light vehicles, and cautious 2025 growth projections.