Ambea (AMBEA) Q2 2024 earnings summary

Executive summary

• Net sales grew by 6% year-over-year in Q2 2024 to SEK 3,519 million, with organic growth at 6%, driven by strong contributions from Vardaga, Stendi, and Nytida, while Altiden and Klara saw declines.

• EBITA/EBITDA increased by 42% to SEK 271 million, with margin improving to 7.7% from 5.8%, and profit for the period more than doubled to SEK 95 million.

• Free cash flow rose by 24% in Q2 to SEK 458 million, supporting dividends, acquisitions, and share buybacks, with cash conversion at 102.5%.

• Several bolt-on acquisitions were completed, and a new share buyback program was launched.

• Ongoing investments in quality, leadership, sustainability, and social responsibility, with a focus on diversity.

Financial highlights

• EBITA/EBITDA margin improved to 7.7% in Q2 2024 (up from 5.8% in Q2 2023), with rolling twelve-month margin at 8.9%.

• Free cash flow for H1 2024 was SEK 872 million, up 42% year-over-year, and rolling twelve-month post-tax free cash flow reached SEK 840 million.

• Net debt/EBITDA (excl. IFRS 16) improved to 2.1x, well below the target of 3.25x.

• SEK 130 million distributed as dividends, SEK 72 million spent on acquisitions, and SEK 285 million on share buybacks in the last twelve months.

• Earnings per share before dilution for H1 2024 were SEK 2.35, up from SEK 1.29.

Outlook and guidance

• Continued organic growth and active M&A agenda expected to drive 8-10% growth target, with new unit openings planned for Nytida and Stendi.

• Profitability target of 9.5% adjusted EBITDA margin remains in focus, with current rolling twelve at 8.9%.

• Leverage at 2.1x EBITDA, below target, providing financial flexibility.

• Growth expected to continue through higher demand, new unit openings, price adjustments, and further acquisitions.

• Management expects continued profitability improvements, especially in Denmark.