Purmo Group (PURMO) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA margin improved in H1 2024 to 12.6% despite weak market conditions and operational inefficiencies, with Q2 earnings down 12% year-on-year due to temporary manufacturing issues.

• Net sales declined 8% year-on-year to EUR 359.4 million in H1 2024 and 5% in Q2 to EUR 171.5 million, mainly due to weak construction activity and lower volumes.

• The Accelerate PG program is ahead of plan, delivering EUR 42–42.3 million in run rate improvements by Q2 and targeting EUR 50 million by year-end.

• Two competing public cash tender offers were announced: Project Grand Bidco (UK) Limited and Haier Europe Appliances Holding B.V.; the Board maintains its recommendation for the Grand Bidco offer.

• Science Based Targets initiative validated the company’s near- and long-term GHG emissions reduction targets, with a 4% reduction in emissions.

Financial highlights

• H1 2024 net sales: EUR 359.4 million (-8%); Q2 2024: EUR 171.5 million (-5%).

• Adjusted EBITDA H1 2024: EUR 45.3 million (-5%); Q2 2024: EUR 18.7 million (-12%), margin 10.9% (down from 11.8%).

• EBIT H1 2024: EUR 23.7 million; Q2 2024: EUR 5.9 million (down 35% year-on-year).

• Profit for H1 2024: EUR 8.7 million; Q2 2024: EUR -0.8 million (EUR 2.9 million previous year).

• Adjusted operating cash flow (LTM): EUR 81.2 million (+20%), with a cash conversion rate of 90.3%.

Outlook and guidance

• Adjusted EBITDA for 2024 is expected to be at or above 2023 levels (EUR 92.3 million), supported by margin management and Accelerate PG program benefits.

• Cumulative targeted adjusted EBITDA run-rate improvements of EUR 50 million and net working capital improvements of EUR 45 million expected by end of 2024.

• Market activity is expected to gradually improve as wholesaler stock levels stabilize and interest rates decline, but geopolitical risks and uncertainties remain.