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Investing.com -- Shares of Industrie de Nora SpA (MIL:IONR) fell sharply by 18% today as the company’s latest financial guidance fell short of market expectations.
Despite reporting a solid fourth quarter with a 15.4% increase in sales to €261.5 million, surpassing the Visible Alpha consensus of €247 million, the company’s forecast for the coming years has raised concerns among investors.
For the fourth quarter of 2024, Industrie de Nora highlighted growth across its business segments, with Electrode Technologies rising 17.4% to €131 million and Water Technologies increasing 17.1% to €95.5 million.
Energy Transition also saw a 4.2% increase to €35 million. Adjusted EBITDA for the quarter grew by 2% to €50.1 million, with notable performance in Water Technologies due to robust growth in the pools business and in Energy Transition, benefiting from production efficiencies.
The company’s order intake showed a significant year-over-year (YoY) increase of 47% and a quarter-over-quarter (QoQ) rise of 77% to €249.7 million. However, the backlog decreased to €558 million from €612 million in 2023, and net cash for FY24 was reported at €67 million, slightly down from €68.2 million in FY23.
Looking ahead, Industrie de Nora provided guidance for FY25, anticipating low single-digit revenue growth and an adjusted EBITDA margin of 17%. This is below the Visible Alpha consensus, which projected a 4.6% increase in revenue to €904 million and an adjusted EBITDA of €155.9 million, or a 17.2% margin.
The company’s new mid-term guidance for 2024-2027 suggests stable to low single-digit revenue growth, with the Energy Transition segment expected to perform below 2025 levels in 2026 and 2027. The adjusted EBITDA margin is forecasted to be between 15-17% for 2026 and 2027, which contrasts with the Visible Alpha consensus compound annual growth rate (CAGR) of 5.7% to €1.021 billion in 2027, and an adjusted EBITDA margin of 18.5%/19.4% for those years.
Analysts have reacted to the news, with Jefferie commenting, "We expect the shares to come under significant pressure this morning following the recent rally."
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