Candles Scandinavia (CANDLE) Q4 22/23 earnings summary

Executive summary

• FY2022/23 revenue grew 33% to SEK 215.1m; EBITDA recovered to SEK 4.0m from -SEK 13.1m, or SEK 8.5m excluding one-off items.

• Strategy shifted to own Private Label production of sustainable home fragrances, supported by organizational streamlining, international sales expansion and planned automation.

Financial highlights

• Total revenue was SEK 215.1m vs SEK 164.4m; net sales were SEK 210.7m vs SEK 158.3m.

• Operating income was SEK 2.1m vs -SEK 14.9m; profit before tax was SEK 1.8m vs -SEK 16.4m; net income attributable to parent shareholders was SEK 0.9m vs -SEK 12.7m.

• Operating EBITDA excluding one-off items was SEK 8.5m, improving SEK 22m YoY; reported EBITDA was SEK 4.0m.

• Operating cash flow was -SEK 29.5m; investing cash flow was -SEK 19.7m, while financing cash flow was SEK 82.8m.

Outlook and guidance

• Management reiterated a growth target of at least 30% annually; the new operating year was expected to benefit from a lower cost base after restructuring.

• New production lines and robots were expected to raise daily capacity from ~25,000 to ~144,000 units, a ~500% increase; most expansion was planned within 9–10 months in existing premises.

• The planned new factory could be delayed by 24–36 months as expanded capacity could be installed in current premises.