Kendrion (KENDR) Q2 2025 earnings summary

Executive summary

• Announced divestment of China business for EUR 70 million to local management, completing the shift to a pure-play industrial company focused on high-margin, high-growth niches in industrial brakes, actuators, and controls, with proceeds funding a special dividend and share buyback.

• Transformation into a pure-play industrials company with expertise in valves, actuators, brakes, and control technology, excluding automotive.

• Proceeds from the sale will be used for a special dividend, share buyback, balance sheet strengthening, and reinvestment in industrial operations.

• Strategic focus is on products with unique selling points, superior profitability (15%+ EBITDA), and at least 5% annual revenue growth potential.

• Net debt reduced to EUR 97.3 million, leverage ratio down to 2.4, and normalized free cash flow improved to EUR 5.7 million.

Financial highlights

• Q2 2025 revenue increased 2% year-over-year to EUR 79.4 million; HY1 2025 revenue up 3% to EUR 157.5 million; normalized EBITDA up 14% to EUR 23.4 million with a margin of 14.9%.

• Q2 2025 normalized EBITDA rose 20% to EUR 12.6 million; HY1 2025 normalized EBITA increased 18% to EUR 15.3 million.

• Net profit before amortization from continuing operations up 28% in HY1 2025; basic EPS for HY1 2025 was EUR 0.49, up from EUR 0.27 in HY1 2024.

• Added value margin improved by 220bp in HY1, mainly from pricing and mix.

• Leverage ratio reduced to 2.4 at Q2 end, with EUR 56 million liquidity available.

Outlook and guidance

• Trading conditions in H2 2025 expected to mirror H1: some weakness in Europe, steady U.S. demand, and mixed trends in Asia.

• Medium-term targets: EBITDA margin of 15–18% from 2025, ROIC of 23–27% by 2027, and annual dividends of at least 50% of normalized net profits.

• Revenue growth expectation adjusted to around 5% per year post-China divestment.

• Focus remains on improving added-value margins, cost discipline, and operational efficiency.