Chervon Holdings 2025 Results: Revenue -8.2%, Net Profit -13.3%, Operating Cash Flow +36.8%

Bulletin Express03-25

Chervon Holdings Limited released its audited results for the year ended 31 December 2025.

Performance Overview • Revenue slipped 8.2% year on year to USD 1.63 billion as customers trimmed orders amid China-U.S. tariff uncertainty. • Gross margin narrowed 1.8 percentage points to 32.9%, reflecting higher tariff-related costs and lower capacity utilisation. • Net profit declined 13.3% to USD 97.69 million; adjusted net profit, excluding a USD 19.24 million disposal gain, fell 42.2% to USD 78.45 million. • Net profit margin eased to 6.0% from 6.4% a year earlier. • Basic earnings per share came in at USD 0.19 versus USD 0.22 in 2024.

Segment & Geographic Trends • Outdoor Power Equipment (OPE) revenue was broadly stable at USD 1.01 billion (+0.1%), driven by continued growth of flagship brand EGO. • Power Tools revenue contracted 18.3% to USD 610.72 million. • Original-brand manufacturing contributed 76.7% of total revenue. • Revenue from North America and China fell 11.5% and 3.8% respectively, while Europe edged up 0.9% and the rest of the world rose 6.8%.

Cash Flow & Balance Sheet • Net cash generated from operating activities increased 36.8% to USD 229.36 million, supported by tighter working-capital management. • Closing cash and cash equivalents stood at USD 379.29 million, up USD 50.53 million from 2024. • Bank loans declined to USD 254.86 million (2024: USD 295.60 million), leaving gearing unchanged at 0.3. • Inventory fell 26.3% to USD 448.05 million; turnover days improved to 177 (2024: 180).

Investment & R&D • Capital expenditure totalled USD 59.90 million, mainly for manufacturing expansion in Vietnam. • R&D spending rose 2.9% to USD 85.80 million, representing 5.3% of revenue, with nearly 200 new products launched, 89% of which were lithium-ion powered.

Dividends • A special dividend of HKD 1.1905 per share (paid 12 June 2025) followed shareholder approval of a subsidiary disposal. • The board proposes a final dividend of HKD 0.4469 per share for 2025, compared with HKD 0.6258 a year earlier.

Strategic Updates • EGO achieved single-digit revenue growth and double-digit point-of-sale gains in North America, maintaining leading market shares in several battery-powered OPE categories. • Production capacity in Vietnam expanded materially, enhancing flexibility against tariff risks, while the transfer of the Steinheim (Germany) facility to Nanjing was completed. • Management reports a pickup in orders and shipments in 4Q 2025 and remains focused on regaining growth momentum in 2026.

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