Georg Fischer (GF) H1 2024 earnings summary

Executive summary

• Sales increased 22.8% year-over-year to CHF 2.4 billion, driven by acquisitions and the consolidation of Uponor, despite macroeconomic uncertainty, geopolitical tensions, and a strong Swiss franc impacting customer sentiment and sales, especially in capital goods and European construction.

• Comparable EBIT rose to CHF 220 million with a margin of 9.1%, supported by performance improvement and cost reduction programs, and cost synergies from the Uponor integration.

• Net profit attributable to shareholders declined 20.8% to CHF 97 million, mainly due to higher interest and tax expenses.

• Free cash flow before acquisitions improved to -CHF 40 million from -CHF 66 million in H1 2023, reflecting better working capital management.

• Sustainability milestones achieved: 73% of sales from products with social or environmental benefits and a net zero ambition by 2050.

Financial highlights

• H1 2024 sales reached CHF 2.4 billion, up 22.8% year-over-year, driven by acquisitions; organic sales declined 3.2%.

• Comparable EBIT margin was 9.1%; adjusted EBITDA margin rose to 12.6%.

• Net profit declined to CHF 97 million, with EPS at CHF 1.18 (down from CHF 1.50).

• Free cash flow before acquisitions was -CHF 40 million, an improvement from -CHF 66 million in H1 2023.

• Net debt increased to CHF 2,041 million due to the Uponor acquisition; net debt/EBITDA at 3.6x (pro forma).

Outlook and guidance

• Organic sales for 2024 expected to be slightly positive, with accelerated growth in H2 and solid full-year performance anticipated.

• Full-year guidance: comparable EBITDA margin of 13%-15%, EBIT margin of 10%-12%.

• Free cash flow guidance for 2024 remains CHF 200-250 million; short-term structural cash flow benefit of CHF 20-25 million expected.

• Midterm organic growth target of 3%-5% per year for all divisions; ROIC target above 20% over the strategic cycle.

• Cost reduction measures of CHF 50 million are being implemented to support profitability.