Brødrene A & O Johansen (AOJ) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 2.8%, exceeding expectations, with both B2B and B2C segments returning to positive growth and B2C expanding for the third consecutive quarter.

• AO's Danish B2B business gained market share, and investments continued in store network, product range, and outlet upgrades, including a new store in Odense and expansion in Stockholm.

• Three acquisitions—Svenska VA-System/VA-Grossisten, VVSKupp/Designkupp, and Workwear Group—were completed, expanding geographic reach and product offerings.

Financial highlights

• Q2 2024 revenue was DKK 1,302m, up 2.8% year-over-year; H1 2024 revenue was DKK 2,553m, down 4.4% year-over-year.

• Q2 2024 EBITDA was DKK 75.1m (margin 5.8%), down from DKK 93m (7.3%) in Q2 2023; gross margin declined by 0.8 percentage points to 22.8%.

• Q2 2024 net profit was DKK 29m, down from DKK 45m in Q2 2023.

• External costs rose by DKK 3m, mainly from higher trade receivable losses; salary costs increased by DKK 12m (9%).

• Cash flow from operating activities in H1 2024 was DKK 14m, a significant improvement from DKK -159m in H1 2023.

Outlook and guidance

• 2024 revenue guidance (excluding M&A) raised to DKK 5,150–5,300m; including acquisitions, expected revenue is DKK 5,300–5,500m.

• EBITDA and EBT guidance remain unchanged at DKK 340–370m and DKK 200–230m, respectively.

• Additional DKK 20m in costs expected in H2 2024 for integration, new hires, and credit risk.

• Expectation to double earnings in H2 2024, driven by organic growth, acquisitions, holiday allowance, and supplier bonuses.