Brunel International (BRNL) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 revenue was €338.6 million, down 1% year-over-year (2% organically), marking the first quarter in 12 quarters without revenue growth due to global uncertainties and client hesitancy.

• Underlying EBIT for Q3 was €17.3 million, down 8% year-over-year and 17% organically, with a 5% EBIT margin.

• Cost reduction plan executed in Q3 will deliver €20 million in annual savings, with €8.5 million realized this year and operating costs reduced 8% year-over-year.

• Free cash flow for the first nine months reached €36.1 million, mainly from improved client collections, and net cash balance as of 30 September 2024 was €21.5 million.

• Leadership changes included the CEO handover to Peter de Laat, departure of the CFO, and ongoing search for a replacement.

Financial highlights

• Q3 gross margin was 19.8%, down 1.6 ppt year-over-year; YTD gross margin at 19.5%.

• EBIT margin for Q3 was 5.1%, with YTD EBIT margin at 4.1% (down from 4.6% last year).

• YTD earnings per share at €0.43, compared to €0.56 in 2023; Q3 EPS at €0.13, down 48%.

• Revenue growth YTD was 4% (5% organically); gross profit YTD down 3%.

• Net cash balance at €21.5 million as of 30 September 2024, with €14.6 million restricted.

Outlook and guidance

• Downward trend in the DACH automotive sector and project delays in Asia are expected to further impact Q4 performance.

• Significant project pipeline, especially in Asia, is expected to drive improvement in 2025, with optimism for high single-digit revenue growth resuming.

• EBIT percentage and conversion targets for 2027 remain on track, with further improvement anticipated next year.