Avolta (AVOL) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 results with turnover of CHF 6,342.6m–6,462.7m, up 11% year-over-year, and positive momentum into the summer.

• Organic growth reached 7.1%, with EBITDA up 15.6% to CHF 568.3m and margin expanding by 40bps to 9%.

• Net profit to equity holders rose 46.7% to CHF 181.9m; adjusted (CORE) net profit was CHF 253.2m.

• Equity free cash flow increased over 29% year-over-year, reaching CHF 213.5m–313.5m, the highest ever for H1.

• Continued strong demand, contract wins, and a robust pipeline support a promising outlook.

Financial highlights

• Gross profit margin improved by 110bps year-over-year to 65–65.5%, driven by strong demand and strategic initiatives.

• CapEx was CHF 223.3m or 3.5% of turnover, slightly below the 4% medium-term target.

• Dividend of CHF 104–104.2m paid in Q2; treasury shares purchased for incentive plans and corporate purposes.

• Net debt slightly increased due to dividend, FX, and share buybacks, but leverage improved to 2.35x from 2.6x at year-end.

• Basic EPS improved to CHF 1.22 (CORE) and CHF 0.08 (IFRS).

Outlook and guidance

• Confirmed organic growth guidance of 5–7% per year, with EBITDA margin expansion of 20–40bps and equity free cash flow up 100–150bps annually.

• Expecting to reach the top end of guidance for 2024, with continued focus on cost discipline and cash flow.

• Leverage target remains 1.5–2x net debt/EBITDA, with flexibility up to 2.5x for bolt-on acquisitions.

• Dividend policy: one-third of equity free cash flow to shareholders, two-thirds for deleveraging and growth.

• No significant changes in estimates or guidance revisions for the remainder of 2024.