Yageo (2327) Q3 2024 earnings summary

Executive summary

• Third quarter revenue was NT$31.738 billion, up 1% sequentially and 16% year-over-year, driven by the Telemecanique Sensors acquisition.

• Net income attributable to the parent was NT$5.649 billion (18% margin), with EPS at NT$11.01, slightly higher than the previous quarter.

• EBITDA margin improved to 27.9% from 27.3% year-over-year.

• For the first nine months of 2024, net sales totaled NT$91.661 billion, up 14.2% year-over-year.

Financial highlights

• Gross margin for 3Q2024 was 35.2%, up 0.1 percentage points year-over-year.

• Operating profit margin was 20.9%, up 1.3 percentage points year-over-year.

• Net income margin for 3Q2024 was 17.8%, with a year-over-year increase of 0.1 percentage points.

• For 1Q–3Q2024, EPS was NT$31.06, up from NT$25.31 in the prior year period.

• OpEx remained controlled at TWD 4.5 billion for Q3, and OpEx as a percentage of sales improved year-over-year.

Outlook and guidance

• Q4 revenue is expected to decline by a low single-digit percentage sequentially due to seasonality.

• Gross margin and operating profit margin are both projected to decrease by a low single-digit percentage point quarter-over-quarter.

• Utilization rates for standard and premium products are targeted to remain at Q3 levels (65% and 75%, respectively) to prepare for Chinese New Year.

• 2025 outlook is cautiously optimistic, with computing, enterprise, and AI applications expected to lead growth.

• Customer inventories are trending toward healthy levels despite ongoing global inflation and international conflicts.