Grupa Kety (KTY) Q2 2024 earnings summary

Executive summary

• Q2 and H1 2024 results were stable despite weak Polish and European markets, with high equipment utilization and solid group performance.

• EBITDA reached PLN 256 million in Q2 (+7% y/y) and PLN 478.3 million in H1 (+9% y/y); net profit was PLN 166 million in Q2 (+10% y/y) and PLN 316.6 million in H1 (+10% y/y).

• All segments increased sales volumes, with flexible packaging, aluminum systems, and extruded products showing strong growth.

• Preliminary agreement to acquire Selt, a leading sun protection company, for PLN 420 million minus net debt, with closing expected by October pending regulatory clearance.

• Dividend of PLN 539.3 million (PLN 55.41/share) approved, to be paid in two tranches in September and November 2024.

Financial highlights

• Q2 2024 sales revenue was PLN 1,300.7 million (-3% y/y); H1 2024 revenue was PLN 2,540.3 million (-6% y/y).

• EBITDA margin improved to 18.8% in H1 2024 (from 16.3%); operating margin at 14.9%.

• High operating cash flows of PLN 220 million in Q2 and PLN 426.6 million in H1.

• Net debt/EBITDA ratio at 0.8, with net debt at PLN 695.2 million as of June 30, 2024.

• Export sales in flexible packaging reached 54%.

Outlook and guidance

• No clear signs of market improvement expected abroad; margin pressure anticipated to continue.

• Management maintains 2024 full-year forecast; demand in construction and FX rates remain key factors.

• Q3 is historically strong for extruded products; efforts to maximize volumes despite lower margins.

• New strategy to be presented by year-end; dividend and Selt acquisition financing preparations underway.

• Net debt projected to rise in H2 2024 due to planned capex and Selt acquisition.