Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Industrie De Nora SpA (STU:M3D, Financial) reported a healthy profitability margin of 17.8% in Q3, aligning with expectations.
- The company achieved over 780 megawatts of green hydrogen technologies delivered in the first nine months, marking a 12% year-on-year increase.
- The Pools division posted a 13% year-on-year revenue growth in the first nine months and a 32% increase in Q3 compared to the same quarter in 2023.
- The water technology systems segment saw a 10.8% increase in backlog compared to December 2023, driven by strong order intake.
- Industrie De Nora SpA (STU:M3D) is expanding its manufacturing footprint with the development of an Italian Giga factory, expected to start operating in 2026.
Negative Points
- Q3 was a soft quarter in terms of revenues due to production planning and one-off effects.
- The energy transition business faced a temporary slowdown in the supply chain, impacting production activities.
- The electro technology division experienced an 8.6% decline in revenues over nine months, requiring a significant recovery in Q4 to meet full-year expectations.
- The backlog in the electro technology division decreased by 24% year-on-year, raising concerns about future revenue streams.
- The energy transition business's EBITDA margin was breakeven, impacted by gigafactory costs and inefficiencies related to production optimization.
Q & A Highlights
Q: Can you explain the expected trend in the electro technology division, given the 8.6% revenue decline over nine months, yet a forecast for flat full-year results?
A: The electro technology business will see a concentration of sales in Q4, driven by customer delivery requests. Despite a lower backlog, recent orders will support future sales, and the business is expected to match 2023 revenue levels.
Q: Could you provide an update on the energy transition pipeline and expectations for 2025 revenue trends?
A: The pipeline includes 88 gigawatts, with 1.3 gigawatts in hot deals. The current backlog will be delivered in 2025, and there is potential for growth depending on project timelines and customer demands.
Q: With the growth in energy transition being lower than expected, should we anticipate a reduced CapEx budget for next year?
A: We are reviewing our CapEx plan and can adjust the intensity based on hydrogen demand. The updated plan will be communicated in March 2025.
Q: How significant could the Dragonfly collaboration and PFAS opportunities be for your business?
A: The Dragonfly collaboration is strategic, focusing on small-scale electrolysers. PFAS regulation is new, with potential order income in 2025 for delivery in 2026, estimated at around EUR8 million.
Q: What is the margin outlook for electro technologies in Q4, considering the expected revenue increase?
A: The margin will be similar to the first nine months, with volume effects helping achieve revenue targets. The focus is on volume rather than margin improvement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
