Accelleron Industries (ACLN) H1 2024 earnings summary

Executive summary

• Revenues reached $505.5 million in H1 2024, up 14.5% in constant currency and 12.7% nominally year-over-year, with organic growth of 6.5%, driven by strong merchant marine, service business, and data center demand.

• Operational EBITDA/EBITA margin improved to 25.4%, up 130 basis points from H1 2023, driven by operating leverage and cost management.

• Net income rose to $89 million, up 89% year-over-year, supported by lower non-operational costs and strong operational leverage.

• Cash flow conversion improved to 34% from 17% in H1 2023.

• Two acquisitions announced: OMC2 (Italy) for fuel injection capacity and True North Marine (Canada) for digital marine solutions, supporting decarbonization and digitalization strategies.

Financial highlights

• Revenue growth was largely volume-driven, with price increases playing a minor role in 2024 compared to 2023.

• Operational EBITDA/EBITA increased to $128 million, with margin up to 25.4%.

• Non-operational costs dropped to $10 million from $49 million in H1 2023.

• OMT fuel injection factory contributed $36 million in revenues to the medium/low-speed segment.

• Income tax expense was $22 million, with a slightly lower tax rate than H1 2023.

Outlook and guidance

• Full-year constant currency revenue growth guidance raised to 9%-12%, organic growth to 4%-7%.

• Operational EBITDA/EBITA margin expected around 25% for the full year.

• Cash flow conversion guidance for the full year is 90%-100%, with focus on cash collection and inventory management.

• Net leverage expected to remain within 0.5x-1.5x operational EBITDA/EBITA.

• Dividend policy remains stable to growing, with excess cash prioritized for M&A over share buybacks.