Komax (KOMN) H1 2024 earnings summary

Executive summary

• Revenues and EBIT declined significantly in H1 2024 due to subdued order intake, market saturation, and weak demand in Europe and Asia, partially offset by growth in the Americas and India.

• Order intake dropped 22.1% to CHF 269.5 million, reflecting customer reluctance to invest amid excess capacity and global uncertainties.

• Market position in China strengthened with a 56% stake in Hosver, a high-voltage cable machine manufacturer.

• Consistent cost reduction and structural optimization measures implemented, including site closures, streamlining product portfolio, and optimizing global distribution, expected to yield CHF 20 million in annual savings.

• Solid business performance in North and South America and high investment activity in India partially offset declines elsewhere.

Financial highlights

• Revenues fell by 17.9% year-over-year to CHF 323.5 million; organic decline was 18.1%, with a 2.5% acquisition-related boost and -2.3% FX impact.

• EBIT dropped to CHF 10.4 million (3.2% margin), including CHF 3.9 million in one-time restructuring costs; adjusted EBIT was CHF 14.3 million (4.4% margin).

• Gross profit margin improved to 63.4% (H1 2023: 62.2%), but personnel expenses rose to 43.1% of revenues.

• Earnings after taxes (EAT) were CHF 2.5 million, with EPS at CHF 0.49 (H1 2023: CHF 7.93); tax rate spiked to 67.5% due to non-capitalized loss carryforwards.

• Free cash flow remained positive at CHF 9.8 million (H1 2023: CHF 11.5 million); cash and cash equivalents at CHF 80.5 million as of 30.06.2024.

Outlook and guidance

• Slight market improvement expected in H2 2024, but visibility remains low.

• Full-year 2024 revenues projected to be around 20% lower than 2023; EBIT expected to remain modestly positive due to cost discipline.

• High customer interest in automation persists, with growth potential to materialize as investment willingness returns.