In This Article:
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Kendrion NV (FRA:K3E) successfully executed a strategic repositioning by divesting its automotive franchise, allowing it to focus on high-growth, high-margin industrial markets.
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The company reported an 8% increase in Q4 revenue, driven by new projects in the mobility segment.
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Kendrion NV (FRA:K3E) has set clear financial criteria for new business investments, aiming for a profitability of at least 15% EBITDA and a lifetime ROI greater than 25%.
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The company has a strong balance sheet post-divestment, enabling potential M&A activities to support strategic objectives.
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Kendrion NV (FRA:K3E) is committed to ESG goals, including a 70% reduction in CO2 emissions and improving gender diversity by at least 25%.
Negative Points
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The company faced a 5% decrease in EBITDA due to inventory reductions and temporary dissynergies following the automotive divestment.
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Overall revenue for the full year decreased by 2%, impacted by weak industrial production globally, particularly in Germany.
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The industrial business groups reported a 15% lower EBITDA on 7% lower revenues, affected by lower revenue and higher central costs.
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Kendrion NV (FRA:K3E) is experiencing challenges in recruiting enough hardware and software engineers, which could constrain growth.
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The company is facing complexities in complying with various EU directives related to ESG disclosures, which could pose challenges in the future.
Q & A Highlights
Q: Could you provide more information on how Kendrion plans to achieve a 15% EBITDA margin in 2025, given the increase from 2024? A: The CEO explained that the 2024 results were affected by the reorganization and the automotive divestment. From January 1, 2025, the full 9 million in cost savings will be effective. Additionally, efforts to increase the added value margin, such as raising prices and optimizing supplier costs, are underway. The company is not dependent on an economic rebound to reach the 15% EBITDA target, though any economic improvement would be beneficial.
Q: How does Kendrion plan to achieve growth in the IAC segment, given the decline in 2024? A: The CEO noted that while the IAC segment faced challenges due to the machine-building industry slowdown, other areas like medical and aircraft showed strength. The company is focusing on new products and markets, such as induction heating and medical actuators, to drive growth. The CEO emphasized that the company is not relying on an economic rebound for growth.