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• Revenue: EUR765 million in Q2, an 11% increase year-over-year.

• Net Industrial Margin: EUR391.5 million, 51.2% of revenues, up from 48.8% in 2023.

• EBITDA Adjusted: EUR110.9 million, 14.5% of revenues, compared to 12.5% in the previous year.

• Free Cash Flow: EUR425.2 million in the last 12 months, EUR74.3 million in the quarter.

• Positive Financial Position: EUR305.3 million at the end of the quarter.

• Dividend Distribution: EUR104.8 million distributed to shareholders.

• Core Business Growth: Coffee machines account for approximately 62% of total revenues, with significant growth in household fully automatic machines and Nespresso capsule systems.

• Ironing Products Growth: 35% growth rate in the second quarter.

• Warning! GuruFocus has detected 4 Warning Signs with DELHF.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive 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.

Negative Points

• 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.