ViaCon Group (VIACON) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw net sales decline 20.5% year-over-year to EUR 45.9 million, with organic growth at -17.5% and all business units affected by market restraints from inflation, high interest rates, geopolitical unrest, and delayed EU investments, especially in Poland, though signs of recovery are emerging.

• Positive developments in Turkey (Bridges and Culverts) and ongoing high demand for stormwater solutions, particularly for data center cooling, are supporting selective growth.

• Strategic initiatives to realize production synergies, exit low-margin sales, streamline support functions, and implement efficiency and growth measures are underway to position for earnings recovery in 2025.

• Management team strengthened with new Vice Presidents for Stormwater Solutions and Bridges & Culverts Solutions as of November 2024.

• FSN Capital V, the private equity owner, has initiated a strategic review, including a potential public listing.

Financial highlights

• Organic sales growth in Q3 was -17.5% year-over-year, with net sales at EUR 45.9 million and all business units affected by market conditions.

• Q3 EBITDA was EUR 4.1 million (9.0% margin), down from EUR 11.5 million last year; underlying EBITDA EUR 4.1 million.

• Operating earnings (EBIT) for Q3 were EUR 2.1 million, down from EUR 8.6 million, with an EBIT margin of 4.5%.

• Cash flow from operating activities was -EUR 0.9 million in Q3 and -EUR 8.0 million for Jan–Sep, mainly due to lower earnings.

• Net debt at quarter-end was EUR 107 million, up from slightly below EUR 102 million a year ago; cash and cash equivalents were EUR 16.4 million.

Outlook and guidance

• Market recovery and normalization of earnings are expected in the second half of 2025, supported by increased project pipelines and backlog, especially in Poland as EU funds are released.

• Efficiency measures and strategic initiatives are expected to restore normal earnings levels in 2025.

• Confidence in margin and EBITDA improvement for 2025 is based on current pipeline and backlog trends.

• Market tentativeness and geopolitical uncertainty are expected to persist into early 2025.