Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Melexis NV (XBRU:MELE, Financial) reported Q2 2024 sales of EUR245.7 million, a 4% increase year-over-year, reaching the higher end of their guidance.
- The company has successfully expanded its product portfolio, including new magnetic position sensors and LIN RGB family, highlighting growth in e-steering technology and ambient lighting solutions.
- Melexis NV achieved five major design wins in Q2 across various regions and applications, demonstrating global success in both EV and combustion engine markets.
- The company expects full-year 2024 sales to reach around EUR1 billion, with a gross profit margin above 44% and an operating margin above 25%.
- Melexis NV's product portfolio is resilient to fluctuations in global car demand, covering all types of powertrains and benefiting from increased demand for comfort and safety features in vehicles.
Negative Points
- The gross result for Q2 2024 was EUR108.8 million, a decrease of 2% compared to the same quarter last year.
- Operating result decreased by 5% compared to the same quarter last year, despite a 1% increase from the previous quarter.
- Net result for Q2 2024 was EUR49.1 million, a 5% decrease compared to the same quarter in 2023.
- There is concern about potential inventory buildup, as the company maintains higher inventory levels to be ready for demand fluctuations.
- Pricing discussions for the next year are anticipated to return to pre-crisis norms, which may involve regular price declines.
Q & A Highlights
Q: What is driving Melexis NV's strong growth compared to peers, especially in Q4?
A: Marc Biron, CEO: Our growth is driven by a strong order book, dynamic orders, and new product launches. Our portfolio is resilient across different car types, and we see increased business in comfort and safety features outside the powertrain, which are becoming more prevalent in various car segments.
Q: How has the order intake been in the first half of 2024, and is there any risk of inventory buildup at customers?
A: Marc Biron, CEO: The order intake has been linear, with orders coming later compared to last year. The peak in customer inventory is behind us, and the order patterns have returned to pre-crisis norms.
Q: Can you provide an update on design wins in automotive and adjacent markets?
A: Marc Biron, CEO: We aim for 20% of our business beyond automotive, with current design wins supporting this goal. Our design win portfolio is healthy across EV, non-EV, comfort, safety applications, and geographically widespread.
Q: What are the expectations for pricing discussions with customers for next year?
A: Marc Biron, CEO: Pricing discussions will start after summer, and we anticipate regular negotiations similar to pre-crisis years. About 40-50% of our customers are under long-term agreements (LTA), mainly traditional customers.
Q: How is Melexis NV performing in non-automotive markets, and what is the outlook for digital health?
A: Marc Biron, CEO: We are investing in emerging markets like robotics, two-wheelers, and wearables. In digital health, we see traction beyond watches, and Q3 is expected to be strong due to market timing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
