Delignit AG cuts 2024 revenue forecast amid market woes

On Friday, Delignit AG (ISIN DE000A0MZ4B0), a prominent supplier of ecological hardwood-based products, announced a revision of its financial guidance for the 2024 fiscal year. The company cited a challenging market environment and a significant drop in demand for its OEM series supply contracts as the primary reasons for the adjustment.

Delignit AG had previously expected demand to improve in the second half of the year, but current trends indicate that this improvement is unlikely to materialize as anticipated. The motor caravan segment, in particular, is experiencing a severe decline in sales due to a major customer halting production until the end of the year. Additionally, the light commercial vehicles sector is also facing lower than expected production volumes from OEM clients, partly because of sluggish demand for electrified vehicle models and delays in the commencement of a new order secured this year.

As a consequence of these market pressures, Delignit AG has revised its revenue projections downward, now expecting to achieve between €63 million and €67 million for the 2024 financial year. This is a significant decrease from the initial revenue guidance of €75 million to €80 million.

In response to the reduced revenue expectations, the Management Board of Delignit AG has escalated its cost optimization efforts that began earlier in the year. The intensified program aims to realize substantial savings across material and personnel expenses, as well as other operating costs.

Despite these measures, the Management Board has also adjusted its profitability outlook, now forecasting an EBITDA margin between 4% and 6%. This is a reduction from the previously projected EBITDA margin of 6% to 7%. The company's efforts to align its operations with the revised financial expectations are underway as it navigates through the current market challenges.

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Source: Investing.com