Industrie De Nora (DNR) Q3 2024 earnings summary

Executive summary

• 9M 2024 revenues reached €601.2 million, with adjusted EBITDA margin at 17.8%, both in line with guidance despite a soft Q3; Q4 is expected to drive full-year recovery.

• Net income for 9M 2024 was €52.5 million, representing 8.7% of revenues, with a net cash position of €29.7 million and €81 million operating cash flow generated.

• Backlog increased by over 10% year-to-date, driven by strong order intake in Water Technologies and continued growth in Energy Transition projects.

• Strategic investments in manufacturing capacity, including the Italian Gigafactory and expansion in Germany and Asia, support long-term growth.

• ESG initiatives advanced, with progress on sustainability targets, gender equality, and clean energy, and notable recognitions.

Financial highlights

• Revenues for 9M 2024 were €601.2 million, down 4.5% year-over-year, mainly due to FX impacts; at constant FX, revenues were €614.7 million.

• Adjusted EBITDA for 9M 2024 was €107.3 million (17.8% margin), down from €122.0 million (19.4%) in 9M 2023.

• Net income for 9M 2024 was €52.5 million, compared to €198.6 million in 9M 2023, which included a €133 million non-recurring gain from TK nucera's IPO.

• Net cash position at September 2024 was €29.7 million, with strong operating cash flow more than covering capex and dividends.

• Operating cash flow exceeded €80 million in the first nine months.

Outlook and guidance

• Full-year 2024 guidance confirmed: low single-digit group revenue growth, with Water Technologies and Energy Transition expected to grow and Electrode Technologies to remain broadly flat.

• Adjusted EBITDA margin for the year expected at around 17%.

• Q4 revenues are secured in the backlog and expected to drive a strong finish to the year.

• Recovery in Electrode Technologies orders anticipated in Q4 and into 2025, especially in Chlor Alkali and Electronics markets.

• CapEx plan is under review and will be updated in March 2025, with flexibility to adjust investment intensity based on hydrogen demand.