Candles Scandinavia (CANDLE) Q4 21/22 earnings summary

Executive summary

• FY21/22 revenue rose 48% YoY to SEK 164.4m; Q4 revenue increased 65% YoY, while the year ended with a net loss following planned capacity and organizational investment.

• A 12-month forward order book and major customer agreements supported expectations for continued growth and improved profitability in FY22/23.

Financial highlights

• Net sales were SEK 158.3m vs SEK 106.8m; total revenue was SEK 164.4m vs SEK 111.1m in FY20/21.

• Operating loss was SEK 14.9m vs operating profit of SEK 13.2m; loss before tax was SEK 16.4m vs profit of SEK 9.6m.

• Net loss attributable to parent shareholders was SEK 12.7m vs net profit of SEK 7.3m.

• Cash flow from operations was negative SEK 34.7m vs positive SEK 4.0m; financing cash flow was positive SEK 41.6m vs negative SEK 0.9m.

Outlook and guidance

• The communicated FY22/23 growth target was raised from 30% to ~45% YoY; the broader outlook cited revenue growth of at least 30% annually in coming years.

• Management expected improved FY22/23 profitability as capacity and organizational investments take effect; most of the forward 12-month order book was already filled.

• A SEK 145m agreement with Rituals covered the current calendar year and was 75% above the prior calendar year's sales value; a separate SEK 12m order was also secured.

• The new factory was targeted for occupancy in H2 2023, with substantially greater production capacity.