Fluidra (FDR) Q2 2024 earnings summary

Executive summary

• Strong H1 2024 performance aligned with expectations, with sequential Q2 sales improvement across all regions and robust growth in North America, while Europe faced weather and macro headwinds.

• Gross margin expanded year-over-year, supported by the Simplification Program and improved geographic mix, with cumulative savings of €47 million and a 2024 run rate target of over €60 million.

• Excellent cash generation and improved working capital, with net debt reduced by €150 million year-over-year.

• Leadership transition occurred with Jaime Ramírez Alzate taking over as CEO from June 2024, emphasizing continuity, growth acceleration, and ongoing transformation.

• Confident in maintaining full-year 2024 guidance midpoint, with narrowed range and positive July trading.

Financial highlights

• H1 2024 sales were €1,171 million, down 1.2% year-over-year; Q2 revenues rose 1% sequentially, with North America up 7%.

• EBITDA increased 2.8% year-over-year to €296 million, with a margin of 25.3%, up 100 bps; Q2 standalone EBITDA margin reached 27.6%.

• Net profit for H1 was €111.9 million, up from €104.1 million last year; cash net profit rose 4% to €157 million.

• Free cash flow was €41 million, significantly higher than €13 million last year, driven by improved working capital and absence of prior year one-off payments.

• Net debt reduced to €1,151 million, down €150 million year-over-year, with leverage at 2.5x EBITDA.

Outlook and guidance

• Confident in delivering full-year 2024 guidance, maintaining the midpoint and narrowing the range, supported by positive July trading and margin expansion.

• New build demand expected to decline around 15% for the year, with high-end projects more resilient; aftermarket remains stable.

• Europe expected to return to positive growth in 2025, with sequential improvement seen in Q2 and July.

• 2025 outlook for North America is positive, with clean channel inventory and expectations of market recovery.

• H1 sales represent 57.5% of annual sales, reflecting seasonality.