HELLA (HLE) Q2 2024 earnings summary

Executive summary

• Sales for H1 FY2024 reached €4.1 billion, up 1.6% year-over-year, with reported sales growth of 0.9% after negative FX effects.

• Operating income increased 1.4% to €248 million, with an operating margin of 6.2% and gross profit margin improved to 25.8%.

• Net cash flow was €86 million (2.1% of sales), stable compared to last year, and CAPEX rose 23% to €340 million.

• Structural measures included realignment of lighting production and planned reduction of 420 jobs at Lippstadt.

• Portfolio management actions included the sale of BHTC and People Sensing business.

Financial highlights

• Group sales reached €4,030 million, up 0.9% year-over-year, with organic growth of 1.6% after adjusting for FX and portfolio effects.

• EBIT rose to €317 million (7.9% margin), including €119 million gain from BHTC sale and €69 million restructuring costs.

• Gross profit increased by 4.4% to €1,041 million, and R&D and SG&A expenses rose due to new program launches.

• Net cash flow to sales ratio was 2.1%, and CAPEX to sales ratio increased to 8.4%.

• Non-cash gain of €17.8 million recognized from HBBL subgroup consolidation.

Outlook and guidance

• FY2024 sales expected between €8.1–8.6 billion, with operating income margin in the 6–7% range, likely at the lower end.

• Net cash flow guidance remains at approximately 3% of sales.

• Growth in Lighting and Electronics expected in low single digits; slight decline in Lifecycle Solutions.

• H2 expected to be slightly better than H1, but not enough to reach the upper end of guidance.

• Company expects to achieve results in the lower half of forecast ranges due to weak industry environment and customer mix effects in China.