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Kendrion contact
Head Office
Kendrion N.V.
Vesta Building - 5th floor
Herikerbergweg 213
1101 CN Amsterdam
The Netherlands
Contact now

Q2 and HY results 2023

Kendrion demonstrates resilience in deteriorating market circumstances
  • HY1 2023 revenue increased by 7% to EUR 273.7 million (HY1 2022: EUR 256.8 million)
  • Q2 2023 revenue grew by 8% to EUR 136.9 million (Q2 2022: EUR 126.9 million)
  • Normalized HY1 2023 EBITDA was EUR 29.7 million, down by 3% from EUR 30.5 million in HY1 2022
  • Normalized Q2 2023 EBITDA was EUR 14.0 million, up by 2% from EUR 13.7 million in Q2 2022
  • The new manufacturing facility in Suzhou Industrial Park is now fully operational
  • China remains on track to launch 7 new Automotive E projects in the coming quarters
  • The long-term outlook remains positive with growth opportunities driven by the global transition towards electrification and clean energy


Key figures
Reported (in EUR million)Q2 2023Q2 2022delta HY1 2023HY1 2022delta
Revenue136.9126.98% 273.7256.87%
EBITDA13.913.44% 29.528.15%
EBITA8.17.67% 17.916.96%
Net profit3.73.70% 8.68.8-2%
EBITDA as a % of revenue10.2%10.6%  10.8%10.9% 
EBITA as a % of revenue5.9%6.0%  6.5%6.6% 

Return on invested capital1 (12 months rolling)

Normalized (in EUR million)2Q2 2023Q2 2022delta HY1 2023HY1 2022delta
Revenue136.9126.98% 273.7256.87%
EBITDA14.013.72% 29.730.5-3%
EBITA8.27.94% 18.119.3-6%
Net profit before amortization 4.45.3-17% 10.012.9-22%
EBITDA as a % of revenue10.2%10.8%  10.9%11.9% 
EBITA as a % of revenue6.0%6.2%  6.6%7.5% 

Return on invested capital1 (12 months rolling)


1Invested capital excluding intangibles arising from acquisitions.
2Normalized for costs and benefits outside the ordinary course of operations. The bridge from reported to normalized figures can be found on page 12 of the PDF.

Joep van Beurden, Kendrion CEO:
“We achieved a solid first half year, despite deteriorating market conditions. Our revenue increased by 7% compared to the first half of 2022 and we protected our profitability despite inflation-induced pressure on our added value margin, especially in Automotive.

Over the course of the first half of 2023, economic activity within the Industrial business segments slowed down, particularly in Germany and China. The anticipated COVID rebound in China did not materialize and the German economy experienced three quarters of stagnation, leading to manufacturing slowing down to levels reminiscent of the pandemic period. In this context, Industrial Brakes, primarily exposed to industrial activity in Germany and China, managed to achieve revenue on par with the previous year. Industrial Actuators and Controls, with more diversified activities, grew by 6%.

In Automotive, the volatility in order patterns subsided. We continued to benefit from the enhancements brought about by the split of the Automotive Group into Automotive Core and E. Our Automotive revenue grew by 10% year-over-year. On a pro-forma basis, Automotive E grew with 17%, while Core saw 7% growth in the first half. Inflation remained a factor, pressuring our added value margin. I am pleased to note that towards the end of the first half of the year, our efforts to raise prices resulted in an improved added value margin, although it still falls short of the 2022 level. Our pipeline in Automotive E continues to develop positively both in terms of nominations and new opportunities, particularly in areas like suspension and smart actuation.

In China, we inaugurated our new manufacturing facility in Suzhou in May 2023. We also transferred the manufacturing operations of our Shanghai and Suzhou locations to this new factory at the renowned Suzhou Industrial Park. The new factory is fully operational now. We anticipate to ramp-up 7 new Automotive E projects over the course of the second half of this year and in Q1 2024.

Looking ahead to the remainder of 2023, we anticipate low economic activity levels. In response, we are implementing short-term measures to safeguard our profitability and financial position. This includes the implementation of short time work at one of our German facilities to reflect the reduced activity level, as well as a reduction in expenses and investments not directly tied to revenue generation. Simultaneously, we will persist in making strategic investments to prepare our organization for further growth. In the long term, we remain confident in the growth opportunities presented by the global push towards electrification and clean energy, not only in the Automotive sector but across all industries, underpinning our longer-term ambitions.”

Progress on strategy
Kendrion is a global, innovative company, with a dedicated focus on actuator products that facilitate the transition towards electrification and clean energy. Kendrion operates through three Business Groups: Industrial Brakes (IB), Industrial Actuators and Controls (IAC), and Automotive, which consists of Automotive Core and Automotive E. Automotive E is responsible for products pertinent to electric vehicles with a clear mission to achieve profitable growth and innovation. Automotive Core manages our business linked to combustion engines, with a strong emphasis on cash and cashflow as its KPIs.

Even amid the persistently challenging economic landscape, which has now extended into its fourth year since the outset of the COVID pandemic, we remain confident in the significant growth opportunities for our products. These products play a pivotal role in driving the global shift towards electrification and the adoption of sustainable energy. Our well-balanced product portfolio acts as a buffer against overdependence on any single vertical or market segment. Encompassing a wide array of domains, our product range spans from wind power, robotics, and automated warehouses to inductive heating technology, circuit breakers for electricity distribution stations, and sound actuators for electric vehicles. The trajectory towards electrification has guided our product innovation and has been a compass for shaping our strategic decisions over the years. It will continue to do so across all our Business Groups and geographies.

Financial review

Q2 2023
In Q2 2023, revenue reached EUR 136.9 million, marking an 8% increase compared to the second quarter of the previous year (EUR 126.9 million). When measured at constant exchange rates, revenue increased by 9%. The contribution of increased average sales prices to consolidated revenue in Q2 amounted to 6%.

IAC achieved a 10% growth resulting in a revenue of EUR 33.2 million. Currency exchange rates had a 1% negative impact on IAC’s revenue, while price increases contributed 6%. Meanwhile, IB’s revenue remained stable at EUR 36.0 million, in comparison to Q2 2022. The growth at constant exchange rates amounted to 2%, and increased average sales prices added 3% to the revenue.

Revenue within the Automotive Group totalled EUR 67.7 million, showcasing an 11% growth compared to the previous year, and a 12% increase when measured at constant exchange rates. Increased sales prices contributed 7% to the quarterly revenue. Automotive E’s quarterly revenue reached EUR 18.5 million, marking a 30% increase from the pro forma level of the previous year. Automotive Core achieved revenues of EUR 49.2 million, signifying a 6% increase from the previous year. If we exclude the impact from currency and price increases, Automotive Core revenue would have experienced a 3% year-over-year decrease.

HY1 2023
Group revenue for the first half of 2023 totalled EUR 273.7 million, reflecting an increase of 7% compared to the previous year. Excluding the effect of currency and sales price increases, growth was 2%.

IAC achieved 6% growth in the first half year, generating a revenue of EUR 66.3 million (HY1 2022: EUR 62.4 million). Excluding currency effects and price increases, volumes grew by 1% with significant weakness observed in textile machinery but balanced by continuing strength in other segments such as medical, aviation, and control technology. Revenue in Industrial Brakes amounted to EUR 74.8 million (HY1 2022: EUR 73.7 million). Excluding the impact of currency and price increases, IB revenue slightly decreased by 1%, impacted by weak industrial production in Germany and China, affecting demand for electromotors at some of IB’s major international customers.

The revenue for the first six months in Automotive reached EUR 132.6 million, indicating 10% growth compared to the previous year, driven by a recovery in global car production from the lower levels observed in the preceding years. The combined impact of currency fluctuations and average sales price increases contributed 5% to the Automotive revenue. Automotive growth was mainly fuelled by E, achieving revenue of EUR 34.5 million, a 18% increase from the pro forma level of the previous year. Core revenue reached EUR 98.1 million, marking a 7% increase from the previous year, primarily attributed to higher average sales prices. 

Q2 2023
The normalized operating result before depreciation and amortization (EBITDA) amounted to EUR 14.0 million, showing a slight increase from the EUR 13.7 million reported in the second quarter of the previous year. EBITDA as a percentage of revenue was 10.2%, in contrast to 10.8% in Q2 2022.

The added value experienced a slight increase of EUR 0.1 million compared to the previous year, mainly due to revenue growth being primarily driven by price increases. The total normalized staff and other operating costs, totalling EUR 48.1 million, remained stable in comparison to the previous year. Realized cost savings were largely offset by substantial wage inflation. Depreciation charges amounted to EUR 5.8 million (Q2 2022: EUR 5.8 million). The normalized operating result before amortization (EBITA) of EUR 8.2 million marked a 4% increase from Q2 2022.

A sum of EUR 0.1 million in costs (Q2 2022: EUR 0.3 million), which were incurred outside the ordinary course of business, was normalized from the results, primarily related to restructuring charges.

HY1 2023
Normalized EBITDA in HY1 2023 declined by 3% to EUR 29.7 million (HY1 2022: EUR 30.5 million). EBITDA as a percentage of revenue concluded at 10.9%, compared to 11.9% in the first half year of 2022.

Half of the margin decrease is attributed to the margin dilution effect resulting from price increases. The added value increased by 1% to EUR 127.2 million (HY1 2022: EUR 126.1 million), with the 2% higher sales volumes partially offset by the ongoing pressure on the added value margin in Automotive. Total normalized staff and other operating expenses were EUR 97.5 million in the first six months, marking a 2% increase compared to the previous year. This increase was entirely realized in the first quarter and largely driven by wage inflation, inclusive of a one-time inflation compensation payment in Germany, as agreed upon with the employee associations.

Depreciation charges in the first six months amounted to EUR 11.6 million, (HY1 2022: EUR 11.2 million), resulting in a normalized EBITA of EUR 18.1 million (HY1 2022: EUR 19.3 million). Normalized net finance costs stood at EUR 4.9 million, in contrast to EUR 1.4 million in the first half of 2022. The increase in finance costs was attributed to higher average debt levels, significant rises in Euribor rates and unfavourable currency results prompted by the strengthening of the Euro. Normalized tax expenses were EUR 2.8 million compared to EUR 4.4 million in HY1 2022. The normalized effective tax rate reached 24.7% (HY1 2022: 28.3%), reflecting the weighted average nominal tax rate of 25.6% along with an additional tax deduction related to R&D in China. Normalized net profit before amortization finalized at EUR 10.0 million (HY1 2022: EUR 12.9 million).

Industrial normalized EBITDA concluded at EUR 23.3 million (HY1 2022: EUR 24.4 million), yielding a margin of 16.5% (HY1 2022: 17.9%). The decrease in EBITDA is attributable by increased staff and other operating expenses, driven by both wage inflation and capacity expansions in IB during the second half year of the previous year.

Normalized EBITDA in Automotive increased by 5% to EUR 6.4 million with a margin of 4.8% (HY1 2022: 5.0%). The underlying added value in Automotive remained steady compared to the previous year, as sales volume increases were offset by margin pressure, particularly in Q1 2023 in conjunction with sales mix effects. Cost levels within Automotive remained constant, with substantial savings in indirect staff compensating for wage inflation and the sustained high usage of outsourced development services.

EUR 0.2 million in operating costs (HY1 2022: EUR 2.4 million), which were incurred outside the regular course of business, have been normalized from the HY1 results in 2023. The after-tax normalized costs amounted to EUR 0.2 million (HY1 2022: EUR 2.3 million). The reported net profit for the first six months of 2023 reached EUR 8.6 million (HY1 2022: EUR 8.8 million). Annex 2.5 provides a reconciliation of non-IFRS financial measures.

Financial position
Total net debt increased by EUR 13.2 million in the second quarter, reaching EUR 160.9 million at the conclusion of Q2 2023. The rise in net debt can be primarily attributed to the EUR 7.1 million cash portion of the optional dividend paid out in May 2023 and a free cash flow of -/- EUR 5.8 million during Q2. The second quarter cash flow encompassed EUR 2.5 million in payments related to restructuring charges and the settlement of the German tax audit, both of which were previously provided for.

The free cash flow for the first six months amounted to a negative EUR 12.5 million. This negative cash flow was influenced by investments exceeding depreciation, increased interest payments, the settlement of the German tax audit, and the seasonal effect on working capital. Investments of EUR 15.4 million (HY1 2022: EUR 16.5 million) encompassed EUR 5.7 million (HY1 2022: EUR 5.3 million) associated with the completion of the new manufacturing facility in China.   

Consequently, due to the heightened net debt, the leverage ratio increased from 2.6 at the close of Q1 2023 to 2.8 by the end of Q2 2023, remaining below the financial covenant of 3.25. With the payment for the new manufacturing facility in China completed within HY1 2023 and the anticipated positive turn in the seasonal effect on working capital during the latter half of the year, debt levels are expected to significantly decrease in HY2. 

Number of employees
The number of employees at the conclusion of the second quarter stood at 2.652, contrasting with 2.747 at the end of Q2 2022. The reduction in FTE is distributed quite evenly, with a decrease in direct labour within Industrial due to a reduced activity level by the end of Q2 2023, and a decline in indirect labour within Automotive because of the restructuring undertaken in the Automotive business during the previous year.

Economic activity levels have slowed down over the course of the first half of the year, and we anticipate this trend to persist throughout the remaining months. We have implemented short-term measures to manage our cost structure, ensuring the protection of both our profitability and cash flow. These measures encompass short time work in one of our German based facilities, as well as reductions in discretionary expenses and investments that are not directly related to revenue generation. While we address these short-term challenges, we remain committed to making strategic investments across our Business Groups in further growth opportunities.

We are confident that the global acceleration towards electrification and clean energy will persist, offering opportunities for the coming years. Assuming a return to a more stable economic environment ahead of us, we continue to execute on our strategic plans aimed at achieving our medium-term financial targets: 5% organic growth between 2019 and 2025, an EBITDA of at least 15% in 2025 and a ROI of at least 25% in 2025.

Analysts’ meeting and audio webcast
Kendrion CEO Joep van Beurden and CFO Jeroen Hemmen will present the interim results to the analysts’ community today at 11:00 a.m. CET in Amsterdam. You can view the audio webcast and its recording on this page.


Amsterdam, 23 August 2023

The Executive Board

For more information, please contact:
Kendrion N.V.
Mr Joep van Beurden
Chief Executive Officer 
Tel: +31 6 82 56 85 65