Novem Group S.A.: HY 2023/24 figures show solid profit margin in demanding environment

• HY 2023/24 revenue of €347.1 million, -3.4% below HY 2022/23
• Adj. EBIT¹ of €38.0 million, -8.4% below PY
• Free cash flow¹ of €33.5 million considerably above PY (€+13.1 million)

Luxembourg, 29 November 2023 – Novem Group S.A. today published its half-year figures for the financial year 2023/24. In a demanding market environment, Novem generated a total revenue of €347.1 million, thus equalling a modest decline over previous year by -3.4%.

Divergent revenue development between segments

In Q2 2023/24, revenue Series of €149.6 million saw a -4.4% decline compared to previous year, predominantly due to weak customer call-offs as well as model changes in Europe and Asia. By contrast, revenue Tooling of €22.3 million increased by €1.4 million or 6.7% year-on-year. Based on constant foreign exchange rates, revenue in this year’s second quarter would have been higher by €6.5 million or 3.8%.

On a segmental basis, revenue decreased in both Europe and Asia, while Americas showed a positive trend. Declining revenue in Europe (€-2.2 million year-on-year) was mainly attributable to sluggish trading conditions. In comparison, Americas (€+1.1 million year-on-year) developed favourably due to the continued strong momentum for SUVs and despite a negative impact of a comparatively weaker US Dollar. Revenue in Asia (€-4.4 million year-on-year) was influenced by currency effects and model changes.

Adj. EBIT in Q2 2023/24 came in at €18.0 million with a €-2.1 million year-on-year variance, resulting in a solid margin of 10.4% for the period. Weak revenue burdened the operating result mainly in Europe and Asia. On top of that, Novem suffered from mediocre utilisation of some European plants. Various savings measures are underway to counteract this, including the closure of production in Bergamo (Italy) to streamline the manufacturing footprint and improve the cost structure. Continued lower input and freight costs as well as customer compensation payments supported the bottom line.

Strong free cash flow and elevated capex

With a free cash flow of €22.3 million in the second quarter of 2023/24, Novem operated at a comparable level to prior year (€22.8 million). With this contribution, free cash flow for HY 2023/24 totalled €33.5 million, which marked a sharp rise of 64.5% y/y.

As of 30 September 2023, capital expenditure¹ of €4.6 million exceeded last year’s level by €0.7 million and the underlying capex ratio rose to 2.7% (PY: 2.2%).

Reduced working capital and robust net leverage

Total working capital¹ as of 30 September 2023 recorded at €136.3 million notably below last year (-12.8%). The favourable deviation of €20.0 million can be attributed mainly to lower tooling net, trade receivables and inventories.

Compared to last year, gross financial debt¹ and cash balances rose in Q2 2023/24. Novem reached a robust cash position of €136.6 million despite the extraordinary dividend payment of €49.5 million in August 2023. Net leverage ratio¹ of 1.4x stood slightly below last year’s level (1.5x Adj. EBITDA¹).

The interim statement for the first half of the financial year 2023/24 can be found on the Investor Relations website at Reports & Presentation.

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1   For the definition/calculation of the used Alternative Performance Measures (APMs), please refer to the glossary provided in the corresponding interim statement for the first half of financial year 2023/24, which can be found on the Investor Relations website under Reports & Presentation.

About Novem

Luxembourg-headquartered Novem is a globally leading supplier of decorative interior trim parts for the premium automotive industry. Across the range of key materials such as genuine wood, aluminium, carbon and premium synthetics, the Company offers unrivalled quality, technology and innovation to a growing customer base including all major premium carmakers worldwide. Founded in Vorbach, Germany, back in 1947, the Company has continuously expanded its global footprint in Germany, Italy, Czech Republic, Slovenia, China, USA, Honduras and Mexico. Novem employs about 5,500 people at 12 locations and achieved revenue of around €700 million in FY 2022/23.

For more information, please visit www.novem.com.