TKH Group (TWEKA) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 turnover was €393.3 million, a 6.2% organic decline from Q3 2023, with EBITA at €42.1 million, down 13.8% organically; Smart Manufacturing and Smart Vision performed well despite market challenges, while Smart Connectivity was impacted by Eemshaven delays.

• High added value maintained at 51.5% for the third or fourth consecutive quarter, attributed to strategic focus and innovation.

• Cost-saving program of €15 million is on track, supporting margin growth and higher capacity utilization.

• Order intake and sales funnel remain strong, supporting a robust year-end order book and expectations for a strong Q4.

• Most growth preparation milestones have been accomplished.

Financial highlights

• Q3 2024 EBITA margin (ROS) for the first nine months was 10.9%, compared to 12.4% in 2023.

• Added value improved to 51.5% in Q3 2024 from 49.0% in Q3 2023.

• Full-year 2024 EBITA guidance revised to €200–210 million, down from €220 million in 2023 (excluding divestments), reflecting Q3 results and Smart Connectivity impact.

• Q4 EBITA expected to be substantially higher than Q3, in line with previous expectations.

• Q3 2023 figures exclude one-off items and divested companies; divestments contributed €39.2 million turnover and €4.7 million EBITA in Q3 2023.

Outlook and guidance

• Q4 is projected to be strong, with performance in line with previous expectations and significantly higher than Q3.

• Full-year 2024 organic turnover expected to be flat, with EBITA (excluding one-offs) between €200–210 million.

• Smart Vision systems anticipate turnover and EBITA growth in H2 2024 versus H1 2024, with positive Q4 impact from secured projects.

• Smart Manufacturing systems expect slightly lower H2 2024 results versus H1 2024, but full-year organic growth over 2023.

• Smart Connectivity systems expect Q4 2024 EBITA to exceed Q3 2024, despite ongoing challenges in Digitalization.