31 January 2024
Somero Enterprises,
Inc.
("Somero"
or "the Company")
Trading
Update
Strong trading in H2 driven
by healthy North American market,
meaningful contribution from
Europe and continued growth in Australia
Somero® provides the following
update on trading for the financial year ended 31 December
2023.
Trading
The Board is pleased to report that
with good trading and excellent operational performance in
fulfilling customer orders globally during H2 2023, it expects the
Company to report 2023 revenue of US$ 120.7m, in line with previous
guidance and market expectations.
As anticipated, the 2023 revenue
expectation reflects the positive impact of the S-22EZ relaunch at
full production on H2 trading and a resilient US non-residential
construction market. A strong finish to the year was achieved
despite ongoing headwinds in the US from concrete supply chain
shortages, elevated interest rates and tightened bank lending, as
noted in the Company's 20 June 2023 trading update. 2023
North America revenues were US$ 88.4m (2022: US$
101.8m).
Facilitated by the Company's
increased strategic focus on and resource allocation to Europe and
Australia, full year trading in both territories continued to
improve year-over-year, driven by sales to new customers and
underpinned by healthy non-residential construction market
conditions. Notably, following the transition from a dealer
model to selling direct in Australia and the addition of key sales
and support personnel, facilitating the broadening of our products
represented in country, sales in Australia grew 18% on 2022 to US$
9.9m. Sales in Europe grew to a lesser extent to US$ 15.1m
compared to US$ 14.9m in 2022, albeit demand for parts and service
has escalated significantly.
In 2023, parts and service revenue
grew 9% on 2022 to US$20.5m. All key markets contributed to
the meaningful growth, particularly Europe and Australia which grew
19% and 43% on 2022, respectively.
In the Rest of World segment, which
comprises regions that each contribute modest revenue and so are
susceptible to volatility period-to-period, sales were down mostly
due to product mix in Latin America and planned volume decline in
China. Except for China, where at the end of the year we completed
the divestment of our direct operations, market conditions in Rest
of World territories were generally positive. Revenues from the
Rest of World segment were US$7.3m (2022: US$8.5m).
Commensurate with the level of
expected revenue, the Board expects the Company to report annual
adjusted EBITDA in line with previous guidance and market
expectations of US$ 36.0m. The yearend cash position is expected to
be $33.0m, slightly better than anticipated reflecting lower net
working capital. These estimates remain subject to any audit
adjustments.
Strategic
Progress
With the introduction of new and
innovative products a key component of the Group's growth strategy,
the Board is pleased to announce it has completed the first step in
the long journey toward electrification with the January 2024
launch of the S-940e, an electric version of the Company's popular
S-940 ride-on machine. Further demonstrating Somero's commitment to
addressing customer needs, a new product filling a product-line
market application gap, the SRS-6s, was also released in the month,
with a third machine scheduled to be launched later this
year.
From an international expansion
standpoint, we have secured a new facility in Belgium to better
serve customers in the region and to address the growing demand for
local repair and servicing of machines. We expect to move
into the facility in Q1 2024 and to be fully operational later in
the year.
Outlook
In 2024, the Board expects the US
market to remain strong, supported by customers reporting high
levels of activity and healthy backlogs, continued growth in Europe
and Australia, and multiple new product launches. With
consideration to these factors, the Board expects 2024 will be
another highly profitable year with healthy cash generation,
revenues that are comparable to 2023, and EBITDA that reflects
modest incremental investment including the new Belgium service and
training center and the annualized impact of strategic resources
added in 2023. This incremental investment is expected to be within
our traditionally targeted US$ 2.0m.
Somero's final 2023 results
announcement is scheduled for release on 5 March 2024.
This announcement contains
inside information for the purposes of Article 7 of EU Regulation
596/2014 as retained as part of UK law by virtue of
the European Union (Withdrawal) Act 2018 as amended. Upon
the publication of this Announcement, this inside information is
now considered to be in the public domain.
For further information, please contact:
Somero Enterprises,
Inc.
www.somero.com
Jack Cooney, President & CEO
+1 239 210 6500
Enzo LiCausi, CFO
Howard Hohmann, EVP Sales
Cavendish Capital Markets Ltd (NOMAD and
Broker)
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+44 (0)20 7220 0500
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Matt Goode/Seamus Fricker/Fergus
Sullivan (Corporate Finance)
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Tim Redfern/Harriet Ward
(ECM)
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Alma (Financial Communications Advisor)
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somero@almastrategic.com
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David Ison
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+44 (0)20 3405 0205
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Rebecca Sanders-Hewett
Will Merison
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