Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carel Industries SpA (FRA:CIG, Financial) reported a return to top-line growth with revenues increasing by 0.7% to €147.4 million compared to the same period last year.
- Adjusted profitability improved to 18.6%, driven by a positive trend in raw material costs and the increasing contribution of digital services.
- The company achieved a significant reduction in net debt, decreasing to €43.9 million from €50.2 million at the end of 2024.
- Strong performance in the North American market, with revenues growing by 10.4% in local currency, supported by positive momentum in data centers.
- Refrigeration sector in Europe showed a strong recovery, contributing to a 3.3% growth in local currency, with expectations for further improvement throughout the year.
Negative Points
- Profit for the quarter was down 38.7% to €10.1 million compared to the same period last year, primarily due to the absence of extraordinary accounting items present in the previous year.
- Asia Pacific region experienced a decline of 15.5% in local currency, attributed to the timing of significant projects and economic weakness in Australia.
- Visibility remains limited due to a short order pipeline, providing little foresight into future demand.
- The HVAC sector remained flat compared to the previous year, with no significant growth observed.
- The company faces challenges in the heat pump market, with no clear signs of improvement and stock levels remaining normalized but stagnant.
Q & A Highlights
Q: Can you provide more details on the order developments and the strength in the recovery, particularly in refrigeration?
A: Francesco Nalini, CEO: The main development in Europe is the accelerated growth in refrigeration after a period of slow investment. This is driven by the F-gas regulation, which we expect to further accelerate demand in the medium term. The recovery is broad across Europe, with no significant differences between countries. Data centers in Europe are also seeing significant improvement, and we expect demand to pick up in the coming quarters.
Q: Could you elaborate on the heat pump demand and its growth in specific countries like Germany?
A: Francesco Nalini, CEO: In Q1 last year, we fulfilled orders that we don't have this year, leading to a slight improvement over Q2-Q3 last year. The improvement is mainly concentrated in Germany, but it's too early to say a market rebound is approaching. We hope for improvement towards the end of the year, but it's not certain yet.
Q: Regarding your guidance for Q2, is the expected growth benefiting from a shift from Q1 orders?
A: Francesco Nalini, CEO: The demand improvement in Q2 is not significantly related to a shift from Q1. Some orders could have been in Q1, but the demand improvement is not due to production shifts. From Q2, the comparison for heat pumps and commercial HVAC should be fair compared to last year.
Q: Can you provide insights into the Asia Pacific performance and expectations for growth?
A: Francesco Nalini, CEO: We expect to revert to growth in Asia Pacific quickly. The timing of specific projects affected Q1, but this will be recovered. Despite economic weakness in Australia, we expect improvement during the year, and the region should return to growth.
Q: On North America, was the 14% revenue increase in Q1 inflated by any buys or actual demand?
A: Francesco Nalini, CEO: The growth was mainly related to data center projects, not stocking up. We produce in the US, so there was no reason for overstocking. The growth was not due to incoming tariffs, as these projects are not prone to overstocking.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
