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SABAF, a leader in the household appliance component industry, reported record-breaking revenue for the fiscal year 2024. The company achieved a 15.8% year-over-year increase, reaching €277 million, marking the highest turnover in its history. Currently trading at $15.86, the stock sits near its 52-week low of $15.26, despite strong financial performance and significant improvements across key metrics. According to InvestingPro analysis, SABAF appears undervalued based on its Fair Value calculations, suggesting potential upside for investors. For detailed valuation insights, explore more companies on the Most Undervalued Stocks list.
Key Takeaways
- SABAF achieved its highest revenue ever, with a 15.8% YoY increase.
- EBITDA grew by 22.2%, improving the margin to 14.6%.
- The company is expanding its product range and innovation, with new projects in North America and Europe.
- SABAF anticipates 6-10% growth in the first half of 2025.
Company Performance
SABAF’s performance in fiscal year 2024 was robust, driven by a recovering household appliance market and strategic expansions. The company reported a 12.7% YoY increase in net results, reaching €16.16 million, supported by operational efficiencies and market share gains. InvestingPro data shows a strong Financial Health Score of 2.6 (rated as "GOOD"), with particularly high marks in profitability (3.48/5) and cash flow management (2.76/5). The acquisition of MEC in Ohio and a new production plant in Mexico have positioned SABAF well for future growth.
Financial Highlights
- Full Year Revenue: €277 million (+15.8% YoY)
- Q4 Revenue: $64.7 million (+2.9% YoY)
- EBITDA: €40.4 million (+22.2% YoY)
- EBITDA Margin: 14.6% (up from 13.8% in 2023)
- Net Result: €16.16 million (+12.7% YoY)
- Operating Free Cash Flow: Positive $12.3 million
Outlook & Guidance
Looking ahead, SABAF expects sustained growth in 2025, with a projected 6-10% increase in the first half. The Mexican plant is anticipated to significantly boost deliveries, and ongoing diversification strategies are expected to enhance synergy development. With the next earnings announcement scheduled for May 21, 2025, investors will be watching closely. The company has set ambitious EPS and revenue forecasts for FY2025 and FY2026, aiming for continued expansion. For comprehensive analysis and detailed forecasts, access SABAF’s full Research Report, one of 1,400+ company deep-dives available exclusively on InvestingPro.
Executive Commentary
CEO Pietro Jiotti expressed optimism about the market’s recovery, stating, "After three years of widespread weakness in demand, the household appliance market appears to be adding for a gradually recovering volumes." He also highlighted the company’s market share gains, attributing them to competitors’ weaknesses.
Risks and Challenges
- Supply chain disruptions could impact production timelines.
- Fluctuations in raw material prices may affect profitability.
- Geopolitical tensions could pose risks to international operations.
- Tariff changes might influence cost structures.
- Market saturation in certain regions could limit growth potential.
SABAF’s strategic initiatives and strong financial performance position it well for future growth, despite potential challenges. The company’s ability to innovate and expand its market presence will be crucial in maintaining its competitive edge.
Full transcript - SABMiller PLC (SAB) Q4 2024:
Conference Operator, Corusco: Good afternoon. This is the Corusco conference operator. Welcome and thank you for joining the Sabas as of 12/31/2024, Approved Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over to Mr. Pietro Jiotti, CEO of Sabaf. Please go ahead, sir.
Pietro Jiotti, CEO, Sabaf: Thank you to everybody to attend this meeting. This morning, the Board of Directors of Sabaf approved the results on the 12/31/2024. Those are the number approved. Consolidated results for 2024 full year revenue €277,000,000 compared with 239,100,000.0 previous year with increasing of the sales of 15.8%. That means for our company, the highest turnover ever in no time higher for Sabah.
EBITDA margin delivered €40,400,000 compared with 33,000,000 in 2023 with an increase in percentage of 22.2%. The percentage of EBITDA on revenue 14.6% compared with 13.8% in twenty three percent EBIT $21,200,000 compared with $17,500,000 20 3 million dollars with an increase of 21.2% group net result 16,160,000.00 versus 14,200,000.0 plus 12.7%. The company generated an operating free cash flow positive to tune of $12,300,000 Q4 ’twenty 4 consolidated result, the revenue $64,700,000 compared with $62,800,000 grew two point nine percent eight $300,000 EBITDA margin compared with 8,700,000 in Q4 ’twenty three, minus 4.9% EBITDA on revenue 12.8% compared with 13.8% in Q4 ’twenty three, EBIT $3,300,000 compared with $4,400,000 in Q4 ’twenty three. Group net result in the quarter $3,400,000 compared with $5,800,000 in Q4 ’twenty three. The outlook that we see for our company, the market for our auto appliances is showing signs for gradual recovery in volumes.
The risks related to the geopolitical situation remain, you can translate, read tariffs, which are mitigated by Sabaf’s direct presence in all major market, including a company, a productive company in U. S. In Ohio, MEC that we acquired in July ’3. Our group expects a sustained growth in ’twenty five, driven by sales for all the four divisions and the new plant in Mexico. The Board of Directors will propose to our general shareholder meeting that will attend in May end of April, sorry, and propose a dividend for per share, dollars As a general comment, we can say that after difficult three year time period, the current year looks set to see a recovery in the market as we confirm it by the order that received in this first quarter.
My other comment on the fourth quarter, I can tell that impacted on margins to factor mainly. One is lower turnover due to the destocking that the main customer decide to do in December and also the increase of labor cost in the second half for ’24 in Turkey that was not offset by depreciation of the Turkish lira against euro, as usually happened in the previous years. The last events in Turkey in the last week, the Turkish lira got a depreciation of $3.04 per euro. 15 days ago was 37, 30 8 per euro, now it’s $41.41.5. If we go ahead on the working capital at 12/31/2024, amounted to 78,200,000.0 compared with 72,000,000 at thirty one December twenty three.
At thirty one December twenty four, the impact of the net working capital on revenue was 27.4% compared with 30.2% at thirty one December twenty three. Of course, the increase of revenue improved this number. In ’twenty four, the company net investment by the group amounted to $14,700,000 or was $16,900,000 in 2023. In the $24,000,000 the positive threshold, as I told before, generated by the Saruho was $12,300,000 was paid in $24,000,000 8 point 7 million dollars as dividend. At thirty one December, the net financial debt was $73,900,000 dollars compared with $73,200,000 at December.
The proposal I just told you, the Board of Directors will propose to show the redistribution of a gross ordinary dividend at $0.58 per share for share outstanding on 05/27/2025. Gross dividend of the ’23 was $0.54 per share. Coming back to on the outlook. As I told you in advance, after three years of widespread weakness in demand, the household appliance market appears to be adding for a gradually recovering volumes, partially due to the stimulus in consumption of residential investment resulting from lower interest rates. There are, however, some reason for uncertainty.
The first economic policy measure taken by the new U. S. Administration have created international tension, the effect of which are difficult to predict. The slab of global production structure with the direct monofaction present in The U. S.
Mitigates the risk associated with the introduction of tariffs. The group expect sustained growth in ’25 as the benefit of the strategy outlined in the business plan that mean diversification of the offering, strengthening of the industrial footprint, development of the group’s synergy and the growth through acquisition is further materializing. In particular, an important contribution is expected from sales in North America, even thanks to the Mexican production plant that is constantly increasing volumes and expanding its product range, Including the first incoming order of MEC MSC, our company in Ohio, very good for the first quarter of this year, as usual happened after U. S. Election.
For old division, sales of new product, which will be partly customized for some customer will begin and should have strengthened market share. The orders received in the first part of the year confirmed this trend. The group is strengthening its effort to improve margins through further efficiency measure, innovative projects and adjustment of price list. I can add also the increase of volume, of course, will like to improve margins. So we are quite positive also on the recovery of the margin in the first quarter of ’twenty five as we see a grow in percentage compared with the first quarter of last year that I remember was a very good quarter.
So the first quarter ’twenty five will do better than first quarter ’twenty four. I’ll stop to talk. I’m available to answer questions. Any questions, if you have, please, I’m here.
Conference Operator, Corusco: Thank you. This is the Corusco conference operator. We will now begin the question and answer session. The first question is from Giuseppe Grimaldi of BNP Paribas. Please go ahead.
Giuseppe Grimaldi, Analyst, BNP Paribas: Good afternoon, everybody. Thanks for your presentation. I have actually three questions. The first one relates to the first quarter. So you touch upon this topic later.
The order book is very good. So what should we expect in terms of growth or in terms of absolute value of revenues for the first quarter? The second one is on the new business, new product that you launched on top of the Mexican plant, what we should expect in terms of additional revenue contribution from these initiatives? And the third question is on the FX, considering that the Turkish lira has depreciated a lot. Should we expect sort of tailwind on the profitability for this year?
Pietro Jiotti, CEO, Sabaf: Okay. The question on forecast for first quarter, of course, I cannot disclose some forecast, but I can tell you that the ordinary income as positive on global digits, but we don’t know if we are able to do the turnover because even if we are working on the sector, on-site of this, sometimes Sunday in some factories all over in Italy in order to deliver most if possible. But there are also mechanical contracts, so we have a strike for extraordinary hours. So it’s not easy to produce all the orders that we have, but it’s a nice problem to have. If we don’t deliver in the first quarter, we will deliver in the second quarter with a positive growth, I think, I can say, between 6% to 10% minimum as range of growing.
Regarding Mexico, also I can say, April and May are also quite consistent in coming orders, so very good in April. Also, May, that is not completed in coming order, but it looks like positive, very positive, I can say. Mexico, we can last year, we delivered roughly million. This year, we have to deliver more than million, so strong increase. Thanks to positive, we also won awarded for quality from Wilpen North America, from the plant of Mexico and from Mabe.
Thanks to those customers. Mabe, we have pulled cobblings, Electrolux to Wolf. We are full of customers that are asking for those from that plant. So we are very excited about that. Turkey, the question was regarding the depreciation of Turkish lira.
Of course, any depreciation on Turkish lira go to, goes to compensated increase of salary that every year the Turkish government, let me say, ask to the company to make the increase of salary roughly 30%, forty % more or less in line with inflections. All the previous year was compensated with similar depreciation Turkish lira. After the election in May, the other one, we don’t know how, but I was able to maintain the lira more or less stable with euro. And this is the reason why in the second half, we suffered a drop of margin due to the increase of cost of labor in Turkey. We’re talking about more or less $1,500,000, 2 million dollars more than expected.
What we did, increase of selling price, of course, in Turkey, it was easier with Turkish customer because they are sensitive on that. It’s not so easy to increase prices with all the other customer due to the fact that all our customer are coming out from three years very tough in the market. But what did our company was able to gain market share? All the trends, I’m sorry to say that, but thanks to the failure of our of some competitors. Robert showed the Clear Chapter 11 last year, the weakness of other competitors in Italy.
So we got an increase of market share for that because it looks like to be a solid company. So the big customer prefer to buy from solid suppliers, sorry, but prefer to buy from suppliers that are consistent and solid in the growth, innovation and delivery, service and quality and so on. I don’t know if I answered correctly to your question. If not, I’m here.
Giuseppe Grimaldi, Analyst, BNP Paribas: Yes, yes. Maybe just a very quick follow-up on the tariff that is at the point that you touched before. Considering there is clearly a lot of uncertainty these days, but do you think your client will be keen to accept any price hike if you have, say, sudden increase in the tariffs?
Pietro Jiotti, CEO, Sabaf: Consider that it’s not exactly a matter of increase our selling price because most of our components are FCO, Franco Fabrica, ex works, delivered to the door of our factories. So for instance, we, for U. S, buy some component from Turkey. Is there business to come to collect our components out of our factories? So it’s it’s a problem of their government to explain why if they have to export from Turkey to U.
S, they have, I don’t know how much it would be, 20%, twenty five %, ten % of tariffs additional. The same things happen, for instance, in Mexico, Ninety Percent of our components are delivered to American companies that has plant in Mexico. So same companies, we have Puma, General Electric, others, there are plenty. So we deliver to that plant. The problem is a problem of our customer to import in The U.
S. Market. What should happen? But we don’t believe that should be that end consumer, the final demand could be have an impact, but we don’t see too much danger on that. We practically, we do not supply in The U.
S. They don’t have supply in The U. S. So they have not much choice, I have to say. Last but not least, we have a plant in The U.
S. To produce hinges. Our competitors produce out of The U. S. Market hinges.
So it should be for us an advantage because if I now from April 2, the tariffs will be, I don’t know, 20% on the hinges coming from Europe, we are advantaged with a 20% less cost for our customers. So this should be also reason why we see the intake in order in MIC higher or very strong in the first month this year, also increasing the marginality.
Giuseppe Grimaldi, Analyst, BNP Paribas: Thanks again. Very, very clear.
Pietro Jiotti, CEO, Sabaf: Thank you.
Conference Operator, Corusco: The next question is from Domenico Ghilotti of Equita. Please go ahead.
Domenico Ghilotti, Analyst, Equita: Good afternoon. My first question is on the ongoing end market recoveries you are mentioning. I wonder if you see this recovery quite broad based in terms of geographies or if you see some differences from a geographical standpoint? Second, you were mentioning the price negotiations. So if you can give us an update on where are you today in terms of price negotiation for 2025 and what is, let’s say, a reasonable final outcome?
And third is on the just on the margin improvement you are mentioning, so some actions to recover profitability because on one side clearly Turkish lira is not under your control. So what are the and apart from volumes, so the operating leverage, what are the other actions that you are implementing in order to recover the profitability? And the very last is on the EBITDA bridge, if you can for 2024. So if you can help us in understanding, so there are different moving pieces to get to the twenty twenty four EBITDA.
Pietro Jiotti, CEO, Sabaf: The first question was regarding the recovery by geography. We see good recovery in The U. S. Market, quite good, let me say, low growth but good in Europe. Central America, good.
South America, after a strong growth last year, we expect to be flat. Brazil, quite good income going from Middle East, Egypt, that kind of country. Also China looks like not so bad for us. India more or less China. Turkey compared with last year is going better.
Last year, Turkey suffered lower in the second half in terms of volumes. But generally speaking, the recovery is quite general. But it was, I think, expected in some way after three years underwater. Because paternity price negotiation, so what we did, Of course, as soon we have awareness of our weakness in terms of labor cost increase last second half, we start to ask increase of price sheet to customer. I cannot hide that was quite a tough job because customer was not available to recognize increase from the price due to their weakness of their balance sheet.
After we start in September, I can say today, we have closed almost 95% of negotiation, someone better, someone less better. But with everybody, we got an increase, someone just 1%, some other also 7%, eight % all over a Turkish customer because they understand better because they have the same problem in cost of labor. That should be important issue for the producing Turkey if they will not be able to increase their selling price on the end market. So generally speaking, I think 2%, three % increase in average will have a benefit increasing price. Of course, we also did all more action possible to improve efficiency in production on the factory, but not only in direct level, but also on the indirect level.
So we try to work on fixed cost in order to try to reduce them. Another point that should help but it takes more time is that in Turkey, for instance, we, for many years, we got our good margin tax today, lower cost of labor. So we avoid to do investment in automation. Now we are evaluating some investment in automation also in the Turkish factories. Of course, we’re expecting our plan of investment more or less that will be similar to last year in ’twenty five.
Margin, I just told you the action more or less. Don’t forget that we have very important pipelines of new project. Thanks to innovation, we are able to get more margin for it and we are doing a new important project for Bosch, more important project for Weerpool North America for Wolf, for Mabe, etcetera. Going to the EBITDA bridge, In the twelve months that we delivered million compared with million last year. The main reason of this improvement came from 6,500,000.0 from increasing of sales volumes, more or less from sales price minus flat to minus €30,000 nothing negative effect from foreign exchange for EUR 800,000 positive effect EUR 2,700,000.0 from raw material cost, lower model raw material cost.
Low negative effect from energy source cost, we paid energy 320,000 more and $24.23. Thanks to the higher volumes, our fixed cost absorption give us a positive effect for 1,900,000. We got a negative effect from the start up India and Mexico induction for 1,400,000. But the worst effect, as I told in the beginning of this conference, was the cost of personnel that had a negative effect for million. Many of these are coming from Turkey, more than 2,000,000.
MEC, MSC, the company acquired in The U. S. Gave a positive effect in EBITDA margin for €1,600,000. That’s all I think, Cliff, you have been clear in the answer. If not, I’m here.
Conference Operator, Corusco: The next question is from Emmanuel Le Negri of Mediobanca. Please go ahead.
Emmanuel Le Negri, Analyst, Mediobanca: I have a couple of questions. The first one is on induction, which generated around $500,000 revenue in 2024. Which kind of contribution do you expect from 2025 and maybe for 2026? And the second one is, which kind of impact do you see on margins in the first part of the year from increasing energy prices?
Pietro Jiotti, CEO, Sabaf: What increasing, sorry? Energy. Okay, sorry. Okay. So the induction business last year started to give us some good hope linked to the fact that we are providing to hire our project.
The country with them is made that we they are producing on our project. So the $500,000 not all, part of 70% of that is coming from royalty that they are paying us, so our net result, net margin. They delivered and sold from the market more or less 165,000 ops, induction ops made with our project. So what I can say is that the design is working well. They are quite happy of that.
And that also is a positive thing because Bayer is one of the major player. We are continuing to innovate with the new feature on the ops with assisted cooking, with control of the pan and so on, several features that we are improving. We did some patent on that. Other customer ordered the hubs that we start to deliver in November, October, November, December. We will continue on this quarter.
It’s not easy to give you a forecast for ’25 up to nowhere because some customer ordered, but they are testing again. They are going slow. It’s quite difficult. I can’t tell you a number, but I don’t know how much reliable it is. So I would prefer don’t give you, but I hope some millions, but we’ll see.
Regarding of but at the project, we are happy because we have five, six customers that started to order. The cost of energy, of course, will have an increased impact on the Q4 regarding negative impact of €4,500, but also here is difficult to forecast because I would think depend from both LAPA in Ukraine in Middle East. Today, the cost of gas for megawatt per hour is €41.42. 1 year ago, those times was 25. In January, it was 54.
So in January, it was 54. Now it’s 42. Last year, it was 26. And in those time, what will happen is not easy to forecast. I can also say that in Turkey, we paid the gas less than Italy.
That could help a little bit because they buy gas directly from Russia and so on. The cost is lower than in Europe. But in one quarter, we’ll consider negative first quarter due all over from the impact of January months. For instance, March and April should look less better. I can tell you that we are putting on our roof of the car factory solar panel that will start to produce energy September 1.
And we are planning to save roughly 500,000 per year with an investment of €3,000,000 as 2.5 megawatt power installed. Just talking about
Conference Operator, Corusco: Mr. Iotti, there are no more questions registered at this time.
Pietro Jiotti, CEO, Sabaf: Okay. Thank you to everybody for attending this meeting. Have a good day.
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