Carel Industries (CRL) Q3 2024 earnings summary

Executive summary

• Nine-month 2024 revenues were €432.9 million, down 12.9% year-over-year (16.4% organic), mainly due to EMEA weakness, high 2023 comparables, and heat pump declines; Q3 revenue and EBITDA margin were stable sequentially from Q2.

• EBITDA margin was 18.2%, down from 22.3% in 2023, reflecting negative operating leverage; net profit fell 32.8% to €39.7 million.

• North America and South America showed positive revenue trends, while EMEA and APAC faced headwinds from high comparables and macroeconomic conditions.

• R&D investments remained above 5% of revenues, supporting innovation and product development.

• Cash generation covered record capex, dividend payments, and increased working capital.

Financial highlights

• Revenues: €432.9 million (-12.9% YoY); organic decline 16.4%; EBITDA: €78.7 million (18.2% margin, -28.9% YoY); net profit: €39.7 million (-32.8% YoY).

• Net financial position: negative €84 million, including €44 million for CFM acquisition; NFP/LTM EBITDA below 1x, or 0.5x net of IFRS 16.

• CapEx reached a record €22 million (+47.1% YoY), mainly for R&D and plant expansion in Poland.

• Earnings per share: €0.35, compared to €0.59 in 2023.

• Net profit margin: 9.2% (down from 11.9% in 2023); capex/revenue ratio: ~5%.

Outlook and guidance

• Q4 2024 consolidated revenues expected to be in line with previous quarters; full-year revenues projected close to €580 million.

• Visibility remains low, with short order lead times and limited forecasting ability, but preliminary October and November figures are positive.

• Positive expectations for North America (data centers, refrigeration) and APAC, while EMEA recovery in refrigeration is slower than anticipated.

• Opex containment initiatives have kept overheads lower despite higher R&D and changes in consolidation scope.

• Management remains confident in long-term market trends for energy efficiency and sustainable refrigerants.