Accelleron reports increased revenues and higher operational EBITA

Accelleron, a global leader in heavy-duty turbocharging, is looking back on a positive first half-year of 2023 which offered strong momentum: revenues at USD 448.6 million, year-on-year growth of +17.1% (20.3% on constant currency basis). This was supported by a combination of positive factors in the merchant marine (container, bulker, tanker) and gas compression markets as well as price increases, neither of which are expected to recur to the same extent in the second half of the year. 

Operational EBITA grew by a strong +11.6% to reach USD 108.0 million. Operational EBITA margin decreased by 1.2 percentage points to 24.1%, driven in particular by additional expenses resulting from the standalone setup. The ongoing cost Inflation in materials, transport and labor was largely offset by price increases. 

Net income of USD 46.9 million was 30.2% lower than the previous year and included USD 48.8 million in one-off and other non-operational costs arising from the separation from ABB and set-up activities in the first half of 2023. Higher net working capital driven by strong volume growth and supply chain challenges led to a free cash flow conversion at a low 17.5%.

High Speed segment
Revenues in the High Speed segment increased by USD 18.3 million, or 17.3% (+18.9% on constant currency basis) to USD 123.8 million compared to the previous year. This is primarily linked to a further strengthening in demand related to the gas compression business in the United States, and price increases. Operational EBITA in the High Speed segment increased by USD 9.7 million, or 43.5% to USD 31.9 million compared to the previous year. The increase results from the strong operating leverage which more than offset the additional expenses arising from the standalone setup. Consequently, the operational EBITA margin increased by 4.7 percentage points to 25.8% in the first half of 2023.

Medium & Low Speed segment
Revenues in the Medium & Low Speed segment increased by USD 47.5 million, or 17.1% (+20.9% on constant currency basis) to USD 324.9 million compared to the previous year. This increase mainly results from a further strengthening of demand in the merchant marine sector as well as price increases compared to the previous year. Operational EBITA in the Medium & Low Speed segment increased by USD 1.6 million, or 2.1% to USD 76.1 million compared to the previous year. The comparatively small increase is largely attributable to supply chain challenges as well as higher standalone costs.

OMT acquisition supports growth strategy
An important milestone for Accellerons growth strategy is the acquisition of OMT, which was completed on July 20. Acquiring OMT, the market leader in fuel injection for the two-stroke engine sector, reinforces Accellerons position as a partner of choice and leading innovator in the development of alternative fuel technologies such as hydrogen, methanol and ammonia for large marine engines and other heavy-duty applications. Moreover, like turbochargers, fuel injection is a mission-critical component which defines performance and comes with intensive service needs. With dual-fuel engine installations becoming the standard in shipping, we expect significant growth opportunities for fuel injection systems of the kind we offer under the OMT brand.

Next-generation turbocharger introduced
Accelleron continues to invest in a strong innovation pipeline with 6.5% of revenues dedicated to research & development. In June 2023, Accelleron unveiled the next generation of turbochargers for two-stroke main propulsion engines, the X300-L series. The platform-based concept provides improved efficiency over the total load range and easy service. It is complemented by Accellerons Turbo Insights digital technology, which sets a new benchmark for turbocharging that will offer ship operators flexibility in responding to uncertainty around the fuels they will use and the way they will operate their vessels in the future.

The companys extended technology portfolio, improved service offerings and progress in digitalization will have a long-lasting positive effect on its market penetration. In the first half of 2023, Accelleron continued to expand the coverage of its installed base with service agreements.

Management confident on outlook, increasing full year 2023 revenues guidance
The company expects to reach an organic revenues growth of around 13% (15% including OMT) for the full year. At the same time, the company confirms its profitability (operational EBITA margin) guidance given during the annual press release on March 29 at the lower end of the mid-term guidance of 23 to 26%. Due to strong growth and inefficiencies in the supply chain, the free cash flow conversion is expected to be in the range of 60% to 70% for the full year.

Accelleron is well positioned to benefit from an exceptionally strong merchant marine business and high demand from the gas compression market, commented Daniel Bischofberger, Chief Executive Officer of Accelleron. We expect positive market developments in the second half of 2023, but with a more normalized growth trajectory.

The Half-Year Report 2023 and further information are available on the website at www.accelleron-industries.com/investors/financial-reports/half-year-report-2023.