Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fluidra SA (XMAD:FDR, Financial) reported strong sales growth across all regions, with North America leading the performance.
- The company successfully executed its Simplification Program, resulting in improved gross margins and significant cost savings.
- Cash generation was robust, with effective working capital management contributing to a reduction in net debt.
- Fluidra SA (XMAD:FDR) updated its full-year guidance, raising the midpoint for both sales and EBITDA.
- The company was awarded Vendor of the Year for the fourth consecutive year by key distributors in the US, highlighting its customer-centric approach.
Negative Points
- Pricing was negatively impacted in the quarter, primarily due to a mix situation in the chemical business.
- Operating expenses increased by 9%, driven by investments in digitalization, R&D, and inflation in labor costs.
- The new construction demand remained weaker year-on-year, although it was offset by resilient aftermarket demand.
- There is uncertainty in the macroeconomic environment, which could impact future performance.
- The company faced higher-than-expected provisions on warranties due to quality issues with a batch of products.
Q & A Highlights
Q: Can you provide an update on the early buy season across regions and your expectations for 2025?
A: The early buy campaign is progressing well and is expected to be ahead of last year, indicating customer confidence. For 2025, while it's early to provide guidance, we are optimistic about the industry stability and Fluidra's positive momentum, despite macroeconomic uncertainties.
Q: Why was pricing negative in the quarter, and what are the expectations for Q4?
A: The negative pricing was mainly due to a mix situation in our chemical business, influenced by seasonal factors. We have implemented a price increase in October, which was well-received, and we expect positive pricing execution in Q4.
Q: How is the demand in Europe, given the recent growth?
A: We are pleased with the positive growth in Europe after several negative quarters. The aftermarket is strong, and we are gaining market share. The trend is expected to continue positively for the rest of the year.
Q: What is Fluidra's strategy on M&A, and is there potential for larger deals?
A: M&A is crucial for accelerating growth. Fluidra focuses on strategic, value-adding, and financially compelling acquisitions. The size of deals will depend on the sector and strategic goals, with opportunities in both commercial and regional markets.
Q: Can you provide details on the split between prices and volumes by geography this quarter?
A: Volumes increased across all regions, with North America showing slightly higher growth than Europe. The negative pricing impact was primarily due to the chemical business, as explained earlier.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
