Introduction to RENK Group AG
In this comprehensive presentation, Christian Weiss, Head of Investor Relations at RENK Group AG, reviews the company’s financial performance for Q3 2024. The presentation highlights RENK’s robust growth trajectory, operational resilience, and strategic priorities, emphasizing its leadership in delivering advanced technology solutions for various industries.
RENK Group AG, a trusted partner in mobility and power transmission technologies, demonstrated significant growth in the first nine months of 2024. Despite macroeconomic challenges, the company’s diversified portfolio, spanning vehicle mobility solutions (VMS), industrial and marine applications (M&I), and high-performance slide bearings, and its strong order backlog, underscore its resilience and continued success.
Key Financial Highlights for Q3 2024
Order Backlog
Total order backlog: Exceeded €4.8 billion, providing revenue coverage of more than 4.5x LTM revenues.
Fixed order backlog: Grew by €34 million compared to December 2023, with frame orders remaining stable at €0.6 billion.
The soft order backlog reflected strong visibility in future projects, including sole-source contracts and successor business opportunities.
Revenue Growth
Group revenue grew by 10.5% year-on-year in Q3 2024, driven by the VMS segment and robust aftermarket performance.
The book-to-bill ratio for the first nine months remained strong at 1.1x, signalling healthy demand despite the absence of large orders in Q3.
Profitability
Adjusted EBIT: Increased by 6% year-on-year, supported by higher operating leverage, efficiency improvements, and a favourable product mix.
Adjusted EBIT margin: Stood at 16.4%, with further improvements expected in Q4 2024.
Cash Flow and Net Working Capital
Free cash flow turned positive in Q3 despite higher capex linked to intangible asset acquisitions.
Net working capital: Increased to 28.7% of LTM revenues, reflecting business growth and project ramp-ups. Measures are underway to reduce this ratio to approximately 25% by year-end.
Segment Highlights
Vehicle Mobility Solutions (VMS)
VMS revenue grew by 45.2% year-on-year, driven by operational improvements and a rising share of aftermarket business.
Margins improved significantly due to higher output, enhanced operational efficiency, and the ongoing stabilization of RENK America.
Industrial and Marine (M&I)
While Q3 revenue declined from the exceptionally high levels of the prior year, the segment remains on a healthy growth trajectory, with an increasing share of higher-margin military and aftermarket business.
Adjusted EBIT margin remained strong at approximately 10%, supporting full-year profitability targets.
Slide Bearings
Revenue grew by 10.5% year-on-year, with sustained demand for e-bearings driven by the electrification trend and maritime applications.
Profitability remained high, benefiting from a favourable mix of new equipment and aftermarket sales.
Strategic Priorities and Growth Outlook
Guidance for 2024
RENK reaffirmed its revenue target of ~€1.1 billion, representing a growth rate of 19% year-on-year.
Adjusted EBIT: Expected to range between €175 million and €190 million, with a medium-term target of ~€300 million driven by a CAGR of approximately 15%.
Operational Focus
The company is implementing measures to optimize net working capital and enhance output, particularly at VMS Augsburg.
RENK America’s operating model is being strengthened to achieve higher performance levels.
Innovation and Market Expansion
RENK is expanding its innovation pipeline with hybridization solutions and advanced mobility technologies.
The establishment of RENK Italia underscores the company’s commitment to capturing market opportunities in key regions.
Conclusion
Christian Weiss concludes the presentation by reiterating RENK’s commitment to delivering long-term value for stakeholders. With a diversified business model, operational excellence, and clear strategic priorities, RENK Group is well-positioned to sustain its growth trajectory and continue to be a reliable partner for its stakeholders.
November 13, 2024
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