Industrie De Nora (DNR) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw a revenue recovery, up 3.8% year-on-year (6.1% at constant FX), with all business units contributing to growth and profitability maintained.

• H1 2024 revenues reached €400.3M, down 4.8% year-on-year, but adjusted EBITDA margin remained strong at 18.8%.

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

• Operating cash flow in Q2 was €47M, covering capex, dividends, and buybacks, with net cash position improving to €14.2M at June 30, 2024.

• ESG initiatives advanced, including DE&I policy, decarbonization plans, and new innovation centers.

Financial highlights

• H1 2024 revenues: €400.3M (-4.8% YoY); Q2 revenues: €211.2M (+3.8% YoY); adjusted EBITDA: €75.3M (18.8% margin); net income: €40.0M (10% margin).

• Net cash position at June 30, 2024: €14.2M, up from €9.4M at March 31, 2024.

• Backlog at H1 2024: €630.1M (+3% vs Dec 2023), with €161.2M in Energy Transition.

• Operating costs: COGS 66.3% of sales, SG&A and corporate 13.9%, R&D 2.0% (70% related to Energy Transition).

• EBIT: €60.4M (15.1% margin) vs €67.4M (16.0%) in H1 2023.

Outlook and guidance

• Full-year 2024 revenues expected to grow at low single digits, with most growth in H2; 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.

• Major project ramp-up in Sweden expected in H2.