Hawesko Holding (HAW) Q2 2023 earnings summary

Executive summary

• Q2 sales were €161m and adjusted EBIT €7.5m; sales were just under 1% and adjusted EBIT 4% below the prior-year quarter, ending the recent negative earnings trend.

• H1 sales rose 0.7% to €314.2m, while adjusted EBIT fell 13.3% to €13.2m, mainly reflecting weaker e-commerce and a less profitable sales mix.

Financial highlights

• H1 gross profit was €138.2m, up 0.2%; gross margin was 44.0% versus 44.2% YoY.

• Reported EBIT was €12.6m versus €17.1m; adjusted EBIT was €13.2m versus €15.3m.

• Net income attributable to shareholders was €6.5m versus €10.4m; EPS was €0.72 versus €1.15.

• H1 restructuring expenses of €0.6m were excluded from adjusted EBIT; prior-year reported EBIT included a €1.9m reversal of a litigation provision.

Outlook and guidance

• FY2023 guidance remains sales growth of +2% to -3% and EBIT of €37m–€42m before possible restructuring costs; EBIT is currently expected near the lower end due to inflation.

• FY2023 free cash flow is forecast at €18m–€22m, reflecting costs for the e-commerce warehouse extension; ROCE guidance is 14%–18%.

• Expected B2B growth is not forecast to fully offset e-commerce weakness; international growth initiatives will add start-up costs.