Cheffelo (CHEF) Q2 2024 earnings summary

Executive summary

• Net sales grew by 11.9% in local currency in Q2 2024, marking the fourth consecutive quarter of growth, with all markets contributing and Denmark delivering standout performance with 40% net sales growth.

• Active customer numbers returned to growth (+0.3% YoY), and order frequency increased by 12.6% year-over-year, reflecting successful marketing and customer experience initiatives.

• Profitability improved, with EBIT margin rising to 7.6% in Q2 and contribution margin at 31.1%, supported by higher volumes and economies of scale.

• Cash generation remained strong, supporting the largest dividend payout in company history (SEK 1.78 per share, MSEK 22.6) and a cash position of MSEK 104.3 at quarter-end.

• A marketing agreement with Middagsfrid was signed, expected to contribute to net earnings from Q4 2024 as Middagsfrid exits the Swedish market.

Financial highlights

• Q2 2024 net sales reached MSEK 256.9, up 11.4% year-over-year; H1 net sales up 5.3%.

• EBIT for Q2 was MSEK 19.5, a 27% increase from last year, with EBIT margin improving by 0.9 percentage points to 7.6%.

• Free cash flow for Q2 was MSEK 6.4, MSEK 60 higher than the same period last year, and cash and equivalents at MSEK 104.3.

• Contribution margin for Q2 was 31.1%, nearly flat year-over-year and in line with annual targets.

• Dividend of MSEK 22.6 paid in Q2.

Outlook and guidance

• Single-digit consolidated growth expected in Q3 and H2 2024, with Denmark maintaining double-digit growth.

• Contribution margin target remains at about 30% annually, with sales and marketing spend projected around 13% of net sales.

• EBIT profitability not expected in Q3 due to seasonality, but profitability anticipated in Q4.

• Long-term targets: net sales CAGR of 6-8% and EBIT margin of 4-6%, with scale benefits expected by 2026.

• Danish growth to slow but remain double-digit; Norwegian pricing increased for Adams Matkasse to strengthen brand.