Q2 2024 De' Longhi SpA Earnings Call Transcript
Key Points
- De'Longhi SpA (DELHF) reported a significant revenue increase of 11% in the second quarter, reaching EUR765 million, driven by strong performance in key geographies and product segments.
- The company achieved a notable improvement in profitability, with the net industrial margin rising to 51.2% of revenues, benefiting from a positive product mix and easing inflationary pressures.
- The coffee machine sector, which accounts for approximately 62% of total revenues, expanded significantly, supported by the consolidation of La Marzocco and double-digit growth in household fully automatic machines and Nespresso capsule systems.
- De'Longhi SpA (DELHF) maintained robust cash generation, with approximately EUR425 million of free cash flow before dividends and M&A over the last 12 months.
- The company confirmed its guidance for a 9% to 11% increase in sales for 2024, with expectations of reaching the upper end of the adjusted EBITDA range of EUR500 million to EUR530 million.
- The comfort segment experienced weakness due to unfavorable climate conditions and the discontinuation of the American Mobile Air Conditioning business, impacting overall growth.
- The Americas region showed a slowdown in organic growth, attributed to the discontinuation of the mobile air conditioning business and weakness in the comfort segment.
- Eversys, part of the professional coffee business, faced challenges with negative performance, particularly in Asia, due to high comparison bases and weak demand in certain countries.
- The company noted a slight negative impact from pricing, as they gave back some savings from cost reductions to support market position and sales.
- The comfort segment, which represents 4% to 5% of total business, is expected to continue having a negative impact in the second half of the year.
Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the De' Longhi first-half 2024 consolidated results. (Operator Instructions)
At this time, I would like to turn the conference over to Mr. Fabio de' Longhi, Chief Executive Officer of De' Longhi. Please go ahead, sir.
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Good afternoon, ladies and gentlemen, and welcome to the De' Longhi Group first-half 2024 results conference call. Today, together with me are Nicola Serafin, Group General Manager; Marco Cenci, Chief Planning and Control Officer; Stefano Biella, CFO; Samuele Chiodetto, Investor Relations Director, M&A Manager; and Sara Mazzocato, IR Specialist.
The group maintained its upward momentum in the second quarter, demonstrating yet again its ability to realize consistent growth in the core business segment and at the same time, noticeably improving profit margins. Turnover went up by
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