Seco (IOT) Q4 2024 earnings summary

Executive summary

• Full-year sales declined 13% to EUR 183.5 million after a decade of double-digit growth, outperforming most sector peers facing similar headwinds.

• Clea revenues were €21.3m, representing 11.6% of sales and up 0.9% in incidence versus FY23.

• Despite revenue drop, gross margin remained at or above 50%, supported by a resilient business model and strong customer relationships.

• Adjusted EBITDA was €28.2m (15.4% of sales), down 44.2% year-over-year, with profitability rebounding in 4Q24.

• Net debt reduced to €41.3m, with financial leverage at 1.5x and positive cash generation of €15.6m in 4Q24.

Financial highlights

• Adjusted EBITDA reached EUR 28.2 million, ahead of consensus, with Q4 adjusted EBITDA margin at 18%.

• Adjusted gross margin for the year was 52.7%, stable year-over-year, with Q4 gross margin at 54.5%.

• Adjusted net income was €1.4m (0.7% of sales), down from €22.9m (10.9%) in FY23.

• Net financial expenses decreased by €3.2m year-over-year.

• Net financial position improved by EUR 11 million to EUR 41.3 million, with net leverage at 1.5x.

Outlook and guidance

• Double-digit revenue growth expected in 2025, with Q1 revenue projected above EUR 47 million and further acceleration in subsequent quarters.

• Gross profit margin guidance remains above 50%, with robust demand in all regions except Germany, which is expected to recover in H2.

• Positive book-to-bill ratio and incoming backlog trends signal end of OEM inventory adjustment.

• Growth in 2025 to be driven by new product pipeline, increased project leads, and favorable macroeconomic conditions.

• CapEx to remain at EUR 20-22 million per year for the next three years.