Avio (AVIO) Q2 2024 earnings summary

Executive summary

• Successfully completed the final Vega launcher flight, delivering Sentinel-2C to orbit, and the maiden flight of Ariane 6, marking the end of a 12-year Vega program and the start of next-gen launchers; Vega C return-to-flight is on track for Q4 2024.

• Defense propulsion business expanded significantly with major new contracts from Raytheon and the US Army, supporting backlog and future growth, and reflecting a strategic push into the US market.

• ESA authorized Avio to conduct Vega commercial operations globally and be launch operator post-2025, with a new commercial team established in Paris and a US subsidiary led by experienced defense executives.

• FY 2024 guidance confirmed, with strong order intake and increased production in defense and technology development segments.

Financial highlights

• Net revenues rose 14.5% year-over-year to €180.6 million in H1 2024, driven by defense propulsion and technology projects.

• EBITDA reported at €8.1 million (+56.8% YoY); adjusted EBITDA at €10.6 million (flat YoY); EBIT improved to -€0.4 million, and net result to -€1.8 million.

• Order backlog reached a record €1,386 million at the end of H1 2024, with new orders exceeding €200 million, half from defense contracts.

• Net cash position declined to €21.5 million from €76.1 million at year-end, mainly due to seasonal working capital outflows and CapEx.

• Dividend and extraordinary dividend totaling €6 million distributed in H1 2024.

Outlook and guidance

• 2024 guidance confirmed: order backlog expected at €1.5–1.6 billion (+10–15% vs 2023), net revenues at €370–390 million (+10%), reported EBITDA at €21–26 million (+10%), and net income at €6–10 million (+10–20%).

• Growth driven by defense propulsion and technology development; backlog roll-out to unlock production and economies of scale in H2 2024.

• Non-recurring costs expected to decline as US business transitions to normal operations.

• No medium-term operational impacts expected from the Russia-Ukraine conflict.