INDUS generates sales of EUR 410 million and EBIT of EUR 26.7 million in first quarter of 2024

INDUS generates sales of EUR 410 million and EBIT of EUR 26.7 million in first quarter of 2024

• Weak economy dampens development, as expected
• Guidance confirmed
• Portfolio strengthened through three complementary acquisitions

Bergisch Gladbach, 14 May 2024 – As expected, sales and income of stock exchange listed INDUS Holding AG remained below the prior year level in the first quarter of 2024. The portfolio companies generated sales of EUR 410.1 million in the first three months of 2024 (previous year: EUR 450.8 million). The decline is due to customers' current reluctance to buy and spend as a result of the weak economy. Adjusted EBITA, i.e. earnings before interest and taxes plus PPA amortization and impairment, amounted to EUR 31.5 million (previous year: EUR 49.5 million). While personnel expenses increased due to significantly higher wages and salaries, the portfolio companies were able to reduce their material costs disproportionately. Operating income (EBIT) amounted to EUR 26.7 million (previous year: EUR 44.8 million). The EBIT margin was 6.5% (previous year: 9.9%). Earnings after taxes amounted to EUR 10.3 million (previous year: EUR 16.0 million).

“As projected by us, the difficult macroeconomic conditions were reflected in the performance of our Group at the beginning of the year,” says Dr. Johannes Schmidt, Chairman of the Board of Management of INDUS Holding AG. “These economic challenges had already been taken into account in our planning. We therefore maintain our guidance for the full year.” The INDUS Board of Management projects sales of between EUR 1.85 and 1.95 billion and operating income (EBIT) of between EUR 145 and 165 million for the financial year 2024.

Well-filled M&A pipeline

INDUS is planning to make acquisitions totalling EUR 70 million in 2024. In the first quarter, the SME Group had acquired the remaining shares in Hauff-Technik GRIDCOM, a specialist in passive components for the fiber-optic infrastructure, and in the US company TECALEMIT Inc., a specialist in fueling and workshop technology. In March 2024, INDUS signed the contracts to acquire the British company COLSON X-Cel, a manufacturer of industrial valves for measurement and control engineering, also with a view to strengthening the existing portfolio. Also in March 2024, GESTALT AUTOMATION, an AI specialist for industrial applications, was added to the INDUS portfolio.

“Our acquisition pipeline is well-filled and prices have declined noticeably in the meantime,” says Schmidt. “Having successfully completed several complementary acquisitions earlier this year, we are currently in negotiations to acquire additional attractive targets.”

Operating cash flow up considerably, seasonal increase in working capital below previous year’s level

At EUR 12.1 million, operating cash flow in the first three months was well above the level of the previous year (EUR 1.5 million). As a result of lower procurement prices, the stabilization of the supply chains and measures to reduce inventories, working capital, which usually increases at the beginning of the year, did not increase as much as in the previous year. Free cash flow amounted to EUR 6.1 million. The previous year's figure (EUR 7.5 million) included a one-time effect from the sale of a property amounting to EUR 14.4 million. The free cash flow forecast for the full year remains unchanged at EUR 110 million.

At 37.0%, the equity ratio on 31 March 2024 was almost at the level of the previous year (37.3%) in spite of the share buyback program. In March 2024, INDUS successfully completed a share buyback program for 1.1 million shares. INDUS now holds 4.09% of the share capital as treasury shares, which can be used, among other things, for the acquisition of new companies.

Infrastructure segment increases EBIT margin despite lower sales

While sales in the Infrastructure segment declined to EUR 131.9 million (previous year: EUR 141.5 million), operating income (EBIT) rose to EUR 11.4 million (previous year: EUR 10.7 million). The measures taken to control costs had a positive effect, with the EBIT margin rising to 8.6% (previous year: 7.6%). GRIDCOM, which was fully consolidated in March 2024, already made a positive contribution to sales and earnings. INDUS continues to project an EBIT margin of 10–12% for the full year.

Sales in the Engineering segment totaled EUR 129.4 million in the first three months of 2024 (previous year: EUR 142.1 million). Operating income (EBIT) amounted to EUR 7.3 million (previous year: EUR 15.6 million). The EBIT margin was 5.6% (previous year: 11.0%). Business was not quite as strong as in the previous year particularly in the sorting systems and packaging technology segment. The portfolio companies expect sales contributions and average margins to pick up again in the course of the year. The forecast range for the EBIT margin remains unchanged at 8–10%. The new acquisition GESTALT AUTOMATION is allocated to the Engineering segment.

Business activity in the Materials segment picked up at the beginning of the year, but remained below the good level of the first quarter of 2023. The portfolio companies generated sales of EUR 148.6 million (previous year: EUR 166.8 million). The metal processing segment is feeling the effects of the reluctance of customers in the agricultural machinery industry in particular. Moreover, the segment companies are exposed to increased price pressure. Operating income (EBIT) amounted to EUR 11.8 million (previous year: EUR 20.1 million). The EBIT margin was 7.9% (previous year: 12.1%). For the full year, INDUS continues to expect an EBIT margin of between 7% and 9%.

“Our portfolio companies are expecting a cyclical recovery in the second half of the year, when business should be much stronger,” says Schmidt. “We continue to project an EBIT margin of between 7.5% and 8.5% for the full year 2024.”

The complete interim report is available here. An overview of the key performance indicators is available here.

About INDUS Holding AG:

Established in 1989 and headquartered in Bergisch Gladbach, INDUS Holding AG is a leading specialist for sustainable corporate development in the German-speaking SME sector. INDUS acquires two to three technology-oriented and promising industrial engineering companies for the Engineering, Infrastructure, and Materials segments annually. As a value-driven investment company with a clear focus on defined growth topics, INDUS provides its 44 operationally independent portfolio companies with active, long-term support in their corporate development, especially in the fields of innovation, market excellence, operational excellence, and sustainability. SDAX-listed INDUS Holding AG has been included in the Prime Standard of the Frankfurt Stock Exchange (DE0006200108) since 1995. INDUS generated sales of around 1.8 billion euros in 2023. For more information, visit www.indus.de.

Note:

This press release contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of INDUS Holding AG and comprise known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. INDUS Holding AG assumes no obligation to updated forward-looking statements.