• Organic Growth: Down 13% for the quarter.
• EBITA Margin: 7.3% versus 8.7% last year; 6% excluding one-off items.
• Revenue: Approximately SEK4.8 billion, reflecting a 13% negative growth.
• Net Leverage: 3.1x compared to 3x in Q3.
• Cash Flow: Strong cash flow of nearly SEK800 million for the quarter.
• Adjusted EPS: Negative SEK0.35 for the quarter.
• Full-Year Revenue: SEK24.6 billion with a 12% organic drop.
• Full-Year EBITA: Nearly SEK2.7 billion with a margin of 10.8%.
• Operating Cash Flow: Over SEK4.2 billion for the full year.
• Dividend Proposal: SEK1.30 per share, down from SEK1.90 last year.
• Inventory Days: 138 days, with a reduction of around SEK1 billion in constant currency for the full year.
• CapEx: 2.1% of net sales for the quarter; 1.3% for the full year.
• R&D Spend: 3.3% of net sales for the quarter; 2.6% for the full year.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:D00.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dometic Group AB (FRA:D00) reported a very strong cash flow of almost SEK800 million, leading to a leverage of 3.1x compared to 3x in Q3.
• The company maintained a decent EBITA margin of 10.8% for the year, despite challenging market conditions.
• Dometic Group AB (FRA:D00) continues to invest in product development and innovation, with a focus on new air conditioners and mobile cooling products.
• The restructuring program introduced is expected to yield annual savings of SEK750 million by the end of 2026.
• The company is seeing stabilization in the Americas and a lower drop in the marine OEM segment, indicating potential recovery in these areas.

Negative Points

• Organic growth declined by 13% in Q4, with a significant drop in sales across all segments.
• EBITA margin decreased to 7.3% from 8.7% last year, and further to 6% when excluding one-off items.
• The RV OEM segment is down to 20% of total sales, reflecting a significant decline in this area.
• The company is facing challenges with inventory management, as customers remain cautious about building inventories.
• Negative adjusted EPS of SEK0.35 was reported, indicating financial pressure on the company's earnings.

Q & A Highlights

Q: What are the expectations for production volumes in EMEA for Q1 2025? A: Juan Vargues, CEO, stated that the market remains soft, with customers focusing more on the second half of the year. He does not anticipate significant improvements in Q1, as major players have had shutdowns, but there is optimism for the second half of the year.

Q: Can you provide insights into the impact of new product launches on the distribution business and the pipeline for upcoming quarters? A: Juan Vargues, CEO, mentioned that new product launches, including the CFX5 and CFX2 series and Igloo-branded products, contributed to growth in 2024. More products are set to launch in Q1 and Q2 2025, which should continue to drive growth.

Q: What are the plans for reducing working capital in 2025, and will the 20% target be reached? A: Stefan Fristedt, CFO, indicated that while the net working capital is decreasing, achieving the 20% target in 2025 might be challenging due to organic development. However, there is potential for further reductions, and efforts will continue.

Q: How is the RV market performing in the US, and is there any improvement in momentum? A: Juan Vargues, CEO, noted that the RV market in the US is showing signs of improvement, with better performance in both RV and CPV segments. The aftermarket is also doing reasonably well, although dealer calibration remains a challenge.

Q: What is the strategy for managing potential tariff impacts, particularly concerning Mexico and Canada? A: Juan Vargues, CEO, explained that while they are monitoring the situation closely, no immediate actions have been taken. The company has capacity in the US and Canada to adjust if necessary, and they are prepared to respond based on how tariffs evolve.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.