Frigoglass (FRIGO) Q3 2024 earnings summary

Executive summary

• Group sales declined 7.1% year-over-year to €331.2m, with Commercial Refrigeration sales up 1% and Glass sales down 27% due to Naira devaluation.

• Transformation plan aggressively pursued, focusing on operational improvements, cost controls, and strategic initiatives.

• Adjusted EBITDA margin improved to 10.4% from 9.8% year-over-year, despite sales decline.

• Gross profit rose 3.2% to €51.8m, with margin up 160bps to 15.7% from cost optimization and improved production in Romania.

• Net loss attributable to shareholders was €12.4m, improved from €32.7m loss in 2023, which included €17.3m in restructuring costs.

Financial highlights

• Commercial Refrigeration sales rose 1% year-over-year to €259.7m, with adjusted EBITDA up 53% to €20.6m and margin up 2.7pp to 7.9%.

• Glass operations sales fell 27% year-over-year to €71.4m, with adjusted EBITDA down 35% to €13.9m; margin 19.4% (down from 21.8%).

• Group adjusted EBITDA was €34.5m (margin 10.4%), nearly flat year-over-year, up from €15.6m (8.9%) in the prior period.

• Net cash from operating activities improved to €4.5m, reflecting better profitability and working capital management.

• Adjusted free cash flow improved due to lower capex and absence of 2023 restructuring one-offs.

Outlook and guidance

• 2024 guidance reiterated: Group sales and EBITDA expected to exceed €400m and €36m, respectively.

• Continued focus on transformation plan, agile pricing in Nigeria, and cost reduction through procurement.

• FY 2024 capex expected at approximately €25m, mainly for Glass segment.

• Glass segment expects long-term growth from modernization and strong customer relationships, despite short-term currency headwinds.

• Ongoing vigilance regarding geopolitical and macroeconomic risks, especially FX and demand.