Industrie De Nora (DNR) Q2 2024 earnings summary

Executive summary

• H1 2024 revenues were €400.3 million, down 4.8% year-over-year, but Q2 saw a 3.8% YoY recovery (6.1% at constant FX), with all business units contributing to growth and profitability maintained.

• Adjusted EBITDA for H1 2024 was €75.3 million (18.8% margin), down from €84.4 million (20.1%) in H1 2023, mainly due to business mix and ramp-up costs.

• Net profit was €40 million (10% margin), down 14.3% year-over-year, with net financial position at €14.2 million as of June 30, 2024.

• Backlog increased by 3% since December 2023, reaching €630.1 million, driven by Water Technologies and Energy Transition segments.

• Major investments in manufacturing expansion, including the Italian Gigafactory groundbreaking, and ESG initiatives advanced.

Financial highlights

• H1 2024 revenues: €400.3 million (down from €420.4 million in H1 2023); Q2 revenues: €211.2 million (+3.8% YoY); adjusted EBITDA: €75.3 million (18.8% margin); net income: €40 million (10% margin).

• Net financial position: €14.2 million as of June 30, 2024, up from €9.4 million at March 31, 2024.

• Operating cash flow in Q2 was €47 million, covering CapEx, dividends, and buybacks.

• R&D expenses: 2.0% of sales in H1 2024, with 70% allocated to Energy Transition.

• Net working capital: €298.2 million as of June 30, 2024, up from €264.6 million at Dec 31, 2023.

Outlook and guidance

• Full-year 2024 revenues expected to grow at low single digits, with most growth in Q4 and adjusted EBITDA margin guided at about 17%, including Gigafactory costs.

• Electrode Technologies revenues expected broadly in line with 2023; Water Technologies and Energy Transition to see low single-digit growth.

• Energy Transition guidance under revision due to regulatory and market delays; 2025 revenues expected flat if no new orders are won.

• Progressive revenue recovery expected in H2 2024, especially in Q4.