LU-VE (LUVE) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue declined 7.5% year-over-year to €296.4 million, mainly due to heat pump market weakness and product mix changes, but EBITDA reached a record €43.0 million (+2.7%), with net profit at €20.1 million (+5.2%).

• Adjusted EBITDA margin rose to 14.5%, reflecting cost containment and lower raw material costs.

• Order book increased 9.4% since December 2023, reaching €170.9 million, indicating normalization post-supply chain disruptions.

• Net financial position improved by €41.3 million year-over-year to -€118.9 million, with leverage reduced to 1.48x EBITDA.

• Strategic focus on automation, process review, cost controls, and growth capex in China and USA for datacenter and industrial cooling.

Financial highlights

• H1 2024 sales: €296.4 million (-7.5% YoY); Q2 2024 sales: €154.5 million (-8.5% YoY).

• EBITDA: €43.0 million (14.5% margin), up 2.7% year-over-year; EBIT: €27.4 million (9.2% margin), up 7.9% year-over-year.

• Net profit: €20.1 million (6.8% margin), up 5.2% year-over-year; adjusted net income: €21.1 million.

• Net financial debt: €118.9 million, improved from €160.2 million in June 2023 and €126.3 million at year-end 2023.

• Net cash generation from operations: €38.2 million (12.9% of sales), up 29.5% YoY; LTM cash flow from operations: €72.2 million.

Outlook and guidance

• Full-year sales volumes expected to contract due to continued heat pump market weakness, market turbulence, and geopolitical tensions.

• Profitability is expected to hold up, supported by process streamlining, efficiency, and global reorganization.

• Medium-term optimism for heat pump market recovery, driven by EU decarbonization policies and nuclear applications impacting sales in 2025.

• Second stage of plant expansion in China and US; continued M&A search and focus on cost efficiency, margin expansion, deleveraging, and net cash generation.