Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alimak Group AB (FRA:2GP, Financial) achieved an all-time high EBITDA adjusted margin of 17%, en route to their target of 18%.
- The company has a strong balance sheet, good cash conversion, and a solid financial position.
- Revenue growth target of 6% to 10% and an EBITDA margin target of over 18% within the next one to two years.
- Positive order intake development in all divisions during the quarter, indicating resilience and potential for future growth.
- Continued investment in growth and operational efficiency, including geographical expansion and digitalization initiatives.
Negative Points
- Facade Access division faced headwinds in North America, with a 16% decline in order intake due to high interest rates and upcoming US elections.
- Construction order intake was down 5%, indicating a challenging market environment.
- Operating cash flows were soft in the quarter due to temporary working capital increases in the construction and Facade Access divisions.
- EBITDA margin for the Construction division was impacted by lower load in the Polish production facility.
- High Safety and Productivity Solutions (HSPS) division saw a decline in EBITDA margin due to cost allocation changes and lower sales.
Q & A Highlights
Q: From HSPS, how should we think about that margin going forward following the end of the central cost allocation? Does that also impact the margins for Q3 over last year's margins?
A: I think you should look at the last four quarters and take the average. That would be the best indicator for what to expect going forward. - Ole Jodhal, CEO
Q: When do you see the market for Facade Access and construction products coming back, especially in the US?
A: It's speculative, but with inflationary pressure starting to come down, interest rates might follow. If rates come down, we might see effects closer to year-end or early next year. However, significant impacts may not be seen until 2025. - Ole Jodhal, CEO
Q: Is the market rebound expectation for both Facade Access and construction?
A: Yes, both are affected by high inflationary pressure and other factors like the US election and post-pandemic office return rates. - Ole Jodhal, CEO
Q: Can you speak more about Alimak's digitalization and smart solutions? How rolled out is it through the current unit base?
A: We have invested heavily in making our machines connected, with control systems and sensors. Most of our machines can now provide load and run data. Adoption varies by industry, but we see increasing customer interest. - Ole Jodhal, CEO
Q: How does digitalization impact productivity and safety in construction?
A: Digital machines provide data for productivity improvements and ensure safety by allowing only certified operators to use the machines. This helps in better planning and logistics at construction sites. - Ole Jodhal, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
