DGL Group Limited (DGL) H2 2024 earnings summary

Executive summary

• FY24 revenue was AUD 465.1 million, flat year-on-year, balancing commodity price declines with volume growth across divisions.

• Underlying EBITDA was AUD 63.7 million, in line with the prior year; statutory NPAT fell 19% to AUD 14.1 million due to higher finance charges, depreciation, and reinvestment in shared services.

• Gross margin improved 6 percentage points to 43.1%, driven by procurement, product mix, and raw material price decreases.

• Cash flow from operations declined 37% to AUD 37.3 million, mainly due to higher working capital, interest rates, and inflationary pressures.

• Five bolt-on acquisitions completed in FY24 contributed to growth, with a focus on integration and operational efficiencies.

Financial highlights

• Revenue: AUD 465.1 million, down 0.2% from FY23, with a 32% CAGR since FY21.

• Gross margin: AUD 200.4 million (43.1%, up 6 points YoY), up 16.4% year-over-year.

• Underlying EBITDA: AUD 63.7 million, flat YoY, constrained by investments in growth and systems.

• Statutory NPAT: AUD 14.1 million, down 18.9% YoY, due to higher interest and depreciation.

• Operating expenses increased 26.5% to AUD 140 million, mainly from headcount and inflation.

• Operating cash flow: AUD 37.3 million, down from AUD 59.3 million in FY23; cash conversion at 86%.

• No dividends declared; all earnings reinvested to support growth.

Outlook and guidance

• Strong demand expected across divisions, with environmental division remaining soft.

• Early FY25 shows stronger volumes in crop protection and stable demand in automotive manufacturing.

• Focus on extracting value from expanded capacity, integrating recent acquisitions, and leveraging operational synergies for FY25 profitability.

• Emphasis on organic growth, efficiency gains from shared services, and system investments.

• New wastewater treatment facility expected online in 2H FY25.