Seco (IOT) Q2 2024 earnings summary

Executive summary

• Net sales for H1 2024 declined 14.8% year-over-year to €95.3 million, 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 13% of total revenue and supporting improved gross margins.

• Gross profit margin improved to 52.7% in H1 2024, up 312 bps year-over-year, despite sector headwinds.

• Adjusted EBITDA declined 40% year-over-year to €15.8 million (16.6% of sales), while gross EBITDA dropped 61% to €10.1 million.

• Management remains focused on innovation, customer value, and long-term profitable growth, with resilience in gross margin compared to peers.

Financial highlights

• H1 2024 net sales were €95.3 million, down from €111.9 million in H1 2023, mainly due to customer destocking.

• Clea software revenue increased 17% year-over-year to €12.6 million.

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

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

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

Outlook and guidance

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

• Second half of 2024 revenues are projected to be broadly in line with the first half.

• 2025 is anticipated to see normalized market conditions, with organic top-line growth above 15% and profitability returning to historical levels.