Grupa Kety (KTY) Q2 2024 earnings summary

Executive summary

• Q2 and H1 2024 delivered stable performance with EBITDA of PLN 256 million in Q2 and PLN 478.3 million in H1, and net profit of PLN 166 million in Q2 and PLN 316.6 million in H1, both up 10% year-over-year, despite weak Polish and European markets.

• All segments reported volume growth (EPS +11%, ASS +9%, FPS +5% in H1), with high equipment utilization and strong operational results.

• Preliminary agreement to acquire SELT, a leading sun protection company, for PLN 420 million minus net debt, with closing expected by October pending regulatory approval.

• Dividend of PLN 539.3 million (PLN 55.41/share) approved, to be paid in two tranches in September and November 2024.

Financial highlights

• Q2 2024 sales revenue was PLN 1,300.7 million (-3% y/y); H1 2024 revenue was PLN 2,540.3 million (-6% y/y); EBITDA margin improved to 18.8% in H1.

• Net profit reached PLN 166.4 million in Q2 and PLN 317.1 million in H1, both up 10% year-over-year.

• High operating cash flows (PLN 220 million in Q2, PLN 426.6 million in H1), mainly from EBITDA.

• Net debt/EBITDA ratio improved to 0.8, with net debt at PLN 695.2 million as of June 30, 2024.

• 62% of annual investment plan completed by mid-year, with over PLN 300 million spent.

Outlook and guidance

• No clear signs of market improvement expected in Europe; margin pressure anticipated to continue.

• Management maintains 2024 full-year forecast; demand in construction and FX rates remain key factors.

• Closing of SELT acquisition and first dividend tranche scheduled for Q3 2024.

• New corporate strategy to be published by year-end.