LU-VE (LUVE) Q3 2024 earnings summary

Executive summary

• Sales for the first nine months of 2024 reached €438.4 million, down 5.6%–5.9% year-over-year, mainly due to a sharp decline in heat pump segment sales, while underlying product sales grew 2.6% and Q3 sales excluding heat pumps rose 6.3%.

• EBITDA hit a record €64.1 million (14.6% margin), up 4.6% year-over-year, driven by lower raw material and production costs.

• Adjusted net income for 9m-24 was €28.2 million–€30.5 million (6.4%–6.1% margin), slightly down year-over-year due to a higher tax rate.

• Order backlog increased 10.1% from December 2023, reaching €172 million.

• The Group expects a contraction in sales volumes for the full year but anticipates stable profitability due to efficiency measures and organizational revisions.

Financial highlights

• 9m-24 sales: €438.4 million, down 5.6%–5.9% year-over-year; Q3-24 sales up 6.3% excluding heat pumps.

• EBITDA increased to €64.1 million (14.6% of revenues) from €61.2 million (13.2%) in 2023.

• Operating profit (EBIT) rose to €40.5 million (9.2%–9.9% margin), up from €36.8 million year-over-year.

• Net financial debt at €125.8 million, leverage at 1.54x EBITDA, improved from €167.6 million year-over-year.

• Net cash generation from operations in 9m-24 was €51.6 million (11.8% of sales), up 18.1% year-over-year.

Outlook and guidance

• Full-year sales volumes are expected to contract, especially in heat pumps, but profitability is projected to hold due to process efficiency and organizational review.

• Medium- and long-term growth expectations are confirmed, with optimism for data center and tumble dryer segments and cautious outlook for heat pumps pending EU incentives.

• Second stage of plant expansion in China completed; US expansion ongoing.

• Continued M&A search and integration of Refrion; emphasis on cost efficiency and margin expansion.