Sogefi (SGF) H2 2023 earnings summary

Executive summary

• FY 2023 revenue rose 5.5% to €1,627.9m at current exchange rates and 9.1% at constant exchange rates; growth reflected volume gains and higher selling prices.

• Adjusted EBITDA increased to €235.6m from €193.7m and adjusted EBIT to €119.4m from €76.4m; net income was €57.8m, including a €6.7m loss from discontinued operations.

• Free cash flow was €37.9m versus €29.3m; net debt excluding IFRS 16 declined to €200.7m from €224.3m.

• New-contract wins included significant e-mobility business; a put option agreement was signed for the proposed Filtration sale.

Financial highlights

• Reported EBITDA was €221.4m versus €195.1m; reported EBIT reached €105.2m versus €70.5m, and net income rose to €57.8m from €29.6m.

• Adjusted EBIT margin improved to 7.3% from 4.9%; adjusted EBITDA margin rose to 14.5% from 12.6%.

• Q4 revenue was €375.3m, down 2.4% reported but up 4.1% at constant FX; EBITDA was €47.5m versus €43.5m and EBIT €16.0m versus €6.6m.

• Q4 net result was positive €12.0m versus a €3.4m loss in Q4 2022; FY revenue growth reflected production volumes up 6.1% and selling prices up 2.8%.

• Contribution margin rose to €477.7m from €423.6m; free cash flow excluding IFRS 16 was €32.7m versus €30.5m, or €45m excluding the ATN acquisition and UK pension-fund cash outflows.

Outlook and guidance

• 2024 revenue is expected to grow at a low- to single-digit rate, with operating profitability excluding non-recurring charges at least in line with 2023, assuming no material macroeconomic deterioration.

• If Filtration is deconsolidated, the continuing perimeter is expected to follow the same revenue trend, with improved operating profitability and a positive net result.

• Structural cost rationalization, organizational adaptation and footprint changes launched from 2021 supported 2023 results and are expected to continue benefiting 2024.