LU-VE (LUVE) Q2 2024 earnings summary

Executive summary

• H1 2024 sales/turnover declined 7.5% year-over-year to €296.4M, mainly due to heat pump market weakness, but adjusted EBITDA rose 2.7% to €43M (14.5% margin); net profit was €20.1M (+5.2%).

• Order book/backlog increased 9.4% since December 2023, reaching €170.9M.

• Net financial position improved by €41.3M year-over-year to -€118.9M, with leverage reduced to 1.48x EBITDA.

• Strategic focus on automation, process review, cost controls, and growth capex in China and USA for datacenter and industrial cooling.

• Key investments completed in China and India; Texas facility expansion delayed to summer 2025.

Financial highlights

• H1 2024 sales: €296.4M (-7.5% YoY); Q2 2024 sales: €154.5M (-8.5% YoY).

• Adjusted EBITDA: €43.0M (14.5% margin), up from €42.5M (13.3%) in H1 2023.

• Net profit: €20.1M (6.8% margin), up 5.2% YoY; adjusted net income: €21.1M.

• Net financial debt: €118.9M, improved from €160.2M in June 2023.

• Net cash generation from operations: €38.2M (12.9% of sales), up 29.5% YoY; LTM cash flow: €72.2M.

Outlook and guidance

• Full-year sales volumes expected to contract due to heat pump market weakness and end-market volatility.

• Profitability expected to hold up, supported by process efficiency and global reorganization.

• Medium-term optimism for heat pump market recovery, with EU policies supporting transition from gas boilers.

• Second stage of plant expansion in China and US; continued M&A search.

• Ongoing focus on cost efficiency, margin expansion, deleveraging, and net cash generation.