Georg Fischer (GF) H1 2024 earnings summary

Executive summary

• Sales increased 22.8% year-over-year to CHF 2.4 billion, driven by acquisitions and the Uponor integration, despite weak European construction markets and negative currency effects.

• Integration of Uponor is ahead of plan, with procurement synergies exceeding 2024 targets and expected annual synergies of CHF 40-50 million by 2027.

• Sustainability progress: 73% of sales from products with social or environmental benefits, exceeding 2025 target, and a reduced accident rate.

• Net profit attributable to shareholders declined 20.8% year-over-year to CHF 97 million, mainly due to higher interest and tax expenses.

• Free cash flow before acquisitions/divestments improved to -CHF 40 million from -CHF 66 million last year.

Financial highlights

• Half-year sales reached CHF 2.4 billion, up 22.8% year-over-year, driven by acquisitions; organic sales declined 3.2%.

• Comparable EBIT margin at 9.1%, with comparable EBIT of CHF 220 million; comparable EBITDA margin at 12.6%.

• Net profit declined to CHF 97 million; EPS fell from CHF 1.50 to CHF 1.18.

• Free cash flow before acquisitions/divestments at -CHF 40 million, improved from -CHF 66 million last year.

• Net debt increased to CHF 2,041 million due to Uponor acquisition; net debt/EBITDA at 3.6x (pro forma).

Outlook and guidance

• Solid full-year 2024 performance expected, with profitability in the strategic corridor: comparable EBITDA margin 13%-15%, EBIT margin 10%-12%.

• Organic sales growth for 2024 expected to be slightly positive, with improvement in H2; building flow solutions to remain negative due to weak European new build markets.

• Cost reduction program of CHF 50 million to support profitability, with most benefits realized in H2.

• Free cash flow guidance for full year remains CHF 200-250 million.

• Net debt/EBITDA targeted below 3x by year-end; CHF 600 million bond issue planned in H2 2024.