Candles Scandinavia (CANDLE) Q1 24/25 earnings summary

Executive summary

• Revenue for Q1 2024/2025 was SEK 24.6 million, down from SEK 30.0 million year-over-year, mainly due to delays in ramping up a new automated production line and a weaker market environment.

• EBITDA was SEK -8.3 million (vs. SEK -1.6 million), and EBIT was SEK -8.8 million (vs. SEK -2.2 million), reflecting increased costs and lower sales.

• Net loss attributable to shareholders was SEK -8.2 million, compared to a profit of SEK 1.8 million in the prior year.

• Installation issues with the new production line led to postponed orders, higher costs, and increased inventory, negatively impacting liquidity.

• The company expects improved performance in Q2 as production stabilizes and a strong order book is processed.

Financial highlights

• Net sales for the quarter were SEK 22.9 million, a 22% decrease year-over-year.

• EBITDA margin was -36% (vs. -5% last year); EBIT margin was -39% (vs. -7%).

• Cash flow from operations was SEK -22.1 million; cash and equivalents at period end were SEK 6.6 million.

• Equity ratio was 58% (down from 71%); return on equity was -14% (vs. -2%).

• Inventory increased to SEK 63.2 million, up SEK 23.8 million during the period.

Outlook and guidance

• The company expects a significantly better Q2 in production, sales, results, and liquidity as the new production line reaches full capacity.

• Full-year growth is anticipated, with results expected to be around break-even.

• Financial targets were revised: instead of 30% annual growth, the goal is now to double sales from SEK 180 million to SEK 360 million.