Nederman (NMAN) Q2 2024 earnings summary

Executive summary

• Achieved the second most profitable quarter in company history, with solid profitability and stable cash flow despite a 10.6% currency-neutral sales decline year-over-year and a more uncertain macro environment.

• Service business continued to grow, supporting margin improvement and positive development across divisions.

• Investments in digital solutions, operational efficiency, and new product launches strengthened positions in structurally growing industries.

• Lower orders and sales were mainly due to fewer major orders and project deliveries in Process Technology, while other divisions showed stable or positive trends.

• Cautiously positive outlook supported by a large order backlog and increased presence in growth industries.

Financial highlights

• Q2 2024 sales were SEK 1,467 million, down 10.6% currency-neutral and 11.9% organic from SEK 1,631 million last year.

• Orders received in Q2 were SEK 1,415 million, down 8.9% currency-neutral and 9.9% organic; YTD orders SEK 2,934 million.

• Adjusted EBITA/EBITDA for Q2 was SEK 188 million (margin 12.8%) vs. SEK 195 million (margin 12.0%) last year.

• Profit after tax for Q2 was SEK 97 million (EPS 2.77) vs. SEK 100 million (EPS 2.86) last year; YTD profit after tax SEK 187 million.

• Cash flow from operations Q2 was SEK 75 million (SEK 98 million last year); YTD cash flow SEK 170 million; net debt at quarter-end was SEK 1,540 million.

• Dividend of SEK 139 million paid in Q2, impacting net debt.

Outlook and guidance

• Demand is slightly slower, with risks from interest rates, economic activity, and geopolitical uncertainty potentially impacting customer investments.

• Large order backlog, strong digital range, and structural growth in recycling, battery, and green energy industries support a cautiously positive outlook for H2 2024.

• Long-term growth potential remains strong due to increasing awareness of industrial air quality and regulatory drivers.