LU-VE (LUVE) H2 2023 earnings summary

Executive summary

• FY23 sales were €617.3m, down 0.2% reported (+1.4% at constant FX; -0.7% LFL); adjusted EBITDA rose 1.7% to €80.1m, or 13.0% of sales.

• Diversified applications supported resilience amid mixed demand; cost-saving programs launched in H2 improved profitability, while the order book normalized to €156m, down 17% vs. Dec. 2022.

Financial highlights

• FY23 revenue was €617.3m vs. €618.6m in FY22; adjusted EBITDA was €80.1m vs. €78.8m, with margin up to 13.0% from 12.7%.

• Adjusted EBIT rose 4.6% to €52.4m; adjusted net income increased 5.4% to €40.7m. Reported group net income fell to €29.7m from €47.7m.

• Q4 sales grew 1.2% YoY; adjusted net income increased 79% YoY, and EBITDA margin improved in line with the FY trend.

Outlook and guidance

• Medium-term framework targets high-single-digit organic sales growth, EBITDA margin toward 14%-15%, and annual growth capex of €20m-€30m.

• Medium-term net working capital target is mid-double-digit as a share of sales, excluding extraordinary fluctuations; leverage target is NFD/EBITDA below 2x.

• 2024 consensus sales imply LFL growth in line with medium-/long-term guidance; management cited potential 2024 upside in traditional applications.

• Heat pumps were 10% of FY23 sales; the strategic objective is to build the share selectively toward ~15% through long-term customer partnerships.