Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nilfisk Holding AS (FRA:NF1, Financial) reported strong organic growth in its specialty and consumer businesses, with 20.1% and 22% growth respectively.
- The EMEA region delivered strong organic growth of 6.7%, driven by positive contributions across the business.
- The company maintained its EBITDA margin before special items at 12.6%, consistent with the previous year.
- Nilfisk Holding AS (FRA:NF1) achieved its highest gross margin since the launch of Business Plan 2026, reaching 42.4% in Q3 2024.
- The company successfully launched new products, SC25 and SC550, with positive initial feedback and ongoing sales expected to ramp up in 2025.
Negative Points
- Nilfisk Holding AS (FRA:NF1) experienced a negative organic growth of 0.8% in Q3 2024, primarily driven by a decline in the professional business.
- The Americas and APAC regions reported negative organic growth of 10.5% and 6% respectively, impacting overall performance.
- Temporary shipment delays in the US due to the SAP rollout affected revenue by approximately EUR7 million.
- The company revised its financial outlook for 2024, indicating that performance falls short of the trajectory required to meet 2026 financial targets.
- Nilfisk Holding AS (FRA:NF1) expects a loss of revenue of around EUR6 million in 2024 due to disruptions caused by Hurricane Milton in Florida.
Q & A Highlights
Q: What are the reasons behind Nilfisk's underperformance in the US market, and how does the company plan to address this issue?
A: Jon Sintorn, CEO, acknowledged that the performance in the US was below expectations. He mentioned that the company needs to improve its go-to-market strategy, product portfolio, and capabilities to address changing market dynamics, such as dealer consolidation. He emphasized that these are not quick fixes but expressed confidence in driving positive business direction in the future.
Q: Is Nilfisk planning a significant strategy change for its US business, and will more details be provided in the annual report?
A: Jon Sintorn, CEO, indicated that as he becomes more familiar with the position, he will provide more details on the strategy changes. The company is actively working on improvements and adjustments in multiple areas.
Q: How does Nilfisk view its service business performance, and is the company satisfied with its current state?
A: Reinhard Mayer, CFO, stated that while there has been substantial growth in the service business over the past three years, the current performance is not satisfactory, particularly in the Americas. The company plans to address this with a different approach to market growth in the region.
Q: What are the expected structural efficiency improvements, and will there be new long-term targets for 2027?
A: Jon Sintorn, CEO, clarified that no new long-term targets for 2027 will be issued at this time. The structural efficiency improvements are aimed at adjusting to lower-than-expected top-line performance and identifying further efficiencies across the group. More details will be shared in February.
Q: How does Nilfisk plan to address the differences in market dynamics between Europe and the US?
A: Jon Sintorn, CEO, explained that Nilfisk has traditionally built a stronger direct sales presence in Europe, which has contributed to resilience. The US market, with its indirect model, requires adjustments to the go-to-market strategy to better align with market dynamics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
