Q2 2024 Dometic Group AB (publ) Earnings Call Transcript
Key Points
- Dometic Group AB (STU:D00) reported a good margin improvement, with EBITA margins increasing to 14% from 13.7% last year, despite a decline in sales.
- The company achieved a strong operational cash flow of almost SEK2 billion, which has helped reduce leverage from 3.2x to 2.9x.
- Service and aftermarket segments showed signs of recovery, with improvements in comparison to Q1, indicating a positive trend.
- The company continues to invest in innovation, launching new products like the CFX2 series and the PLB15 portable battery, which are expected to drive future growth.
- Dometic Group AB (STU:D00) is optimistic about the mobile cooling segment, with new product launches under the Igloo brand contributing to margin expansion and market share gains.
- The company experienced an 8% decline in organic growth and a 9% decrease in EBITA, reflecting challenging market conditions.
- OEM sales were down 17%, with negative growth across most regions, particularly impacting the high-margin marine segment.
- The company has faced nine consecutive quarters of negative organic growth, indicating ongoing market challenges.
- High interest rates continue to affect consumer spending, particularly in the RV and marine sectors, limiting potential sales growth.
- Logistics costs remain elevated, although they have improved slightly, they are still higher than pre-pandemic levels, impacting overall profitability.
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Hello. Good morning [Juan] speaking. Good morning to the presentation of this second quarterly report for 2024. Moving over to the highlights in the quarter. Looking at the market, we still see tough market conditions. So no major changes from that perspective. If we talk in general terms, then we will, of course, look to our different sales channels we have.
We see also retailer inventories coming down very much in the US, but also in the other areas, which is also leading, obviously to a better situation for our service and aftermarket business as well for distribution. While we see OEM steel weak.
Look at our performance, we are happy to deliver a good margin improvement considering obviously the loss that we have on the top line. Service and aftermarket's down 1%, which is a substantial recovery in comparison to Q1 of this year, but also very much in line with our expectations after the last quarter. Distribution also a clear improvement, ending up at minus 2% and very
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