VBG Group (VBG) Q2 2024 earnings summary

Executive summary

• Achieved the second-best quarter ever with 3% year-over-year sales growth to SEK 1,494.3M, driven by strong North American demand and the Rathi Transpower acquisition, despite challenging European markets.

• EBITA increased by 2.4% to SEK 270M in Q2, with a margin of 15.5%; earnings per share rose 21% to 6.71 SEK.

• For H1 2024, sales increased 6.3% to SEK 3,029.3M, EBITA rose to SEK 476.4M, and EPS reached SEK 14.54.

• Growth was supported by price increases and high demand in Mobile Thermal Solutions (MTS), now over 55% of revenues.

• Rathi Transpower acquisition in India is performing above expectations and contributing to global sales.

Financial highlights

• EBITA margin was 15.5% in Q2 and 15.7% year-to-date; Q2 EBITA reached SEK 270M.

• Profit after financial items for Q2 was SEK 211.6M, up from SEK 181.2M last year.

• Operating cash flow in Q2 reached SEK 205M; H1 2024 cash flow from operations was SEK 349M.

• Equity/assets ratio at June 30, 2024 was 62.6%; interest-bearing net debt/EBITDA improved to 0.27.

• Group turnover up 6.3% for the first six months of 2024; EBITA margin strengthened to 15.7% year-to-date.

Outlook and guidance

• Trailer market in Europe expected to remain weak through 2024, with recovery not anticipated until 2025.

• MTS off-road segment in North America expected to sustain growth; bus segment demand flattening.

• Order intake and order book are flat year-over-year entering Q3; no formal forecast provided.

• Management remains positive about the future, citing a balanced portfolio and strong financial position despite macroeconomic and geopolitical uncertainties.

• Company aims to maintain current margin levels in Truck and Trailer Equipment.