SIT (SIT) H1 2024 earnings summary

Executive summary

• H1 2024 consolidated revenues declined 9.6% year-over-year to €150.9M; Q2 revenues were €81.8M, down 1.8% year-over-year.

• Heating & Ventilation H1 sales fell 16.1%, while Metering grew 8.2%; Smart Gas Metering up 6.6%, Water Metering up 11.7%.

• EBITDA for H1 rose to €13.5M (9.0% margin), while adjusted net income was -€3.1M versus €1.6M in the prior year.

• Net financial debt increased to €160.9M from €146.4M year-over-year.

• Adjusted net loss was €3.1M (2.1% of revenues); reported net loss improved to €6.1M from €18.1M.

Financial highlights

• H1 EBITDA increased 2.4% to €13.5M; EBIT improved to -€0.1M from -€20.0M, which included a €19.5M impairment.

• Gross margin improved as raw material costs fell to 51.2% of revenues from 52.9% in H1 2023.

• Net financial charges included a one-off €3.9M cost from amended banking contracts.

• Cash flow from operations was -€2.1M after €9.4M in capex; net trade working capital (NTWC) rose to €83.6M (27.6% of revenues).

• Depreciation, amortization, and impairment were €13.7M, down from €33.4M due to a prior year goodwill impairment.

Outlook and guidance

• No structural recovery expected in Heating & Ventilation for H2; market remains volatile with delayed decision-making.

• Metering business FY sales expected in line with prior year, with Water Metering to grow and Gas Metering to see slight reduction.

• Heating & Ventilation FY performance anticipated to mirror Q2 year-over-year trends.

• Consolidated EBITDA margin projected to improve by 100–200 bps; capex planned at €20M; net debt targeted between €145–€150M.

• Selective investments planned, mainly for R&D and new headquarters.