Seco (IOT) Q2 2024 earnings summary

Executive summary

• Net sales for 1H24 were €95.3 million, down about 15% year-over-year, mainly due to customer destocking and weak demand across geographies and sectors.

• Clea software revenues grew 17% year-over-year to €12.6 million, now representing over 13% of total revenue and supporting margin expansion.

• Gross profit margin improved to 52.7% in 1H24, up 312 bps year-over-year, driven by higher software revenue and lower component costs.

• Adjusted EBITDA declined 40% year-over-year to €15.8 million (16.6% of sales), impacted by higher OpEx and unfavorable production mix.

• The company remains focused on innovation, customer value, and long-term profitable growth, maintaining resilience compared to peers.

Financial highlights

• 1H24 net sales: €95.3 million, down from €111.9 million in 1H23, mainly due to customer destocking.

• Clea software revenue up 17% year-over-year to €12.6 million, now 13% of total revenue.

• Gross margin at 52.7%, up 312 bps, driven by Clea and favorable component costs.

• Adjusted EBITDA at €15.8 million (16.6% of sales), down 40% year-over-year.

• Adjusted net income at €3.9 million (4.1% of sales), down 69% year-over-year.

Outlook and guidance

• Full-year 2024 revenues expected to exceed €180 million, with gross margin above 50%.

• Second half 2024 revenues expected to be broadly in line with the first half.

• 2025 anticipated to see normalized market conditions, targeting 15%+ organic top-line growth and a return to historical profitability.