Simona Q3 Report 2023
Strong earnings amid significant decline in revenue in first nine months
Group revenue down by 16% – EBIT margin rises to 8.9% – No recovery in sight in core EMEA market
SIMONA Group was again faced with a significant decline in revenue in the third quarter. Sluggish economic growth in Europe and the United States, coupled with lacklustre investment spending in the industrial sector, left their mark, with revenue falling by 21.5 per cent to €147.4 million (previous year: €187.8 million). Group revenue totalled €467.2 million in the first nine months of the 2023 financial year, 15.5 per cent less than in the same period a year ago (€553.1 million). Down by just 7.7 per cent compared to the previous year, earnings before interest and taxes (EBIT) held up well in the first nine months despite the decline in revenue. The Group’s EBIT margin thus increased from 8.2 to 8.9 per cent, which is in excess of the forecast of 6-8 per cent. EBIT generated in the third quarter amounted to €15.8 million (previous year: €16.4 million; -3.7 per cent).
The SIMONA Group felt the effects of weak investment activity on the part of customers, particularly in the reporting regions covering EMEA and the Americas. This contrasted with a slight upturn in revenue in the Asia-Pacific region. Within the EMEA region as a whole, Germany, France, Italy and the Czech Republic in particular were affected by anaemic demand.
Revenue was down in almost all business lines. Driven by buoyant sales in the area of aircraft interiors and rail vehicles, the Mobility business line managed to buck the general trend and expand its revenues. The Industry business line was impacted by a further slowdown within the chemical process industry in EMEA and the Americas, while Asia recorded slight growth on the back of solid semiconductor business. The Infrastructure business line felt the reluctance within the public sector to commission projects. The Advertising & Building business line had to contend with a significant downturn. Project business relating to equipment for fish farms was brought to a sudden standstill following the announcement of a tax on fish farms in Norway.
Despite the significant decline in revenue, the Group recorded strong earnings in the first three quarters of the 2023 financial year. Underpinned by a higher gross profit margin, EBIT stood at €41.6 million (previous year: €45.1 million). This represents a year-on-year decline of 7.7 per cent. Due to the more pronounced decline in revenue, the EBIT margin rose from 8.2 to 8.9 per cent.
