Kendrion (KENDR) Q4 2024 earnings summary

Executive summary

• Completed strategic repositioning by divesting nearly all automotive activities, transforming into a pure-play industrial company focused on high-margin markets in Europe, China, and the U.S.

• Mobility segment, formerly retained automotive, is now fully integrated into IAC and reported separately.

• Pro forma FY 2024 revenue mix: IAC 40%, IB 39%, Mobility 21%.

• Strict investment criteria and disciplined M&A approach implemented, targeting industrial sector synergies and minimum 15% EBITDA margin.

• Cost reduction program fully implemented, delivering €9 million in annual savings from January 2025.

Financial highlights

• FY 2024 revenue from continued operations declined 2% to €301.5 million; Q4 revenue up 8% year-over-year to €76.0 million, driven by 39% growth in mobility.

• Normalized EBITDA for FY 2024 fell 11% to €37.0 million; Q4 normalized EBITDA down 5% to €7.5 million.

• Net profit before amortization for FY 2024 at €11.8 million, down 15% year-over-year.

• Free cash flow from continued operations was €12.1 million, but normalized free cash flow for 2024 was negative €3.0 million due to discontinued operations.

• Leverage ratio at year-end was 2.7x, expected to improve to 2.4x after final divestment proceeds.

• Proposed dividend of €0.45 per share, representing a 59% payout of normalized net profit before amortization.

Outlook and guidance

• Economic conditions in H1 2025 expected to mirror 2024, with modest organic growth and focus on margin improvement; positive signs from German policy changes and Chinese stimulus.

• Confident in achieving 15%-18% EBITDA margin from 2025, 23%-27% ROI by 2027, and annual dividend payout of at least 50% of normalized profit.

• Targeting 5-8% annual revenue growth from 2025-2027.

• Growth in China expected to continue, with mobility segment maintaining or slightly increasing Q4 revenue levels.

• Strict cost control and operational efficiency initiatives underway, including ERP system transition.