Cynca Nordic (CYNCA) Q4 2023 earnings summary

Executive summary

• FY2023 net sales rose 12% to SEK 5,762m, including 4% organic growth; EBITA was SEK 623m with a 10.8% margin. Q4 sales grew 3%, including 1% organic growth, and EBITA was SEK 165m.

• Q4 operating cash flow was SEK 228m; financial net debt fell SEK 328m to SEK 2.1bn, with year-end leverage at 2.5x EBITDA excluding earn-out debt.

Financial highlights

• Q4 net sales were SEK 1,559m; EBITA SEK 165m, adjusted EBITA SEK 167m, EBIT SEK 89m and EPS SEK 0.00. FY EBITA was SEK 623m, adjusted EBITA SEK 622m, EBIT SEK 318m and EPS from remaining operations SEK 0.28.

• FY profit after tax from remaining operations was SEK 104m versus SEK 97m in 2022; Q4 profit after tax from remaining operations was SEK 1m.

• FY revenue growth comprised SEK 409m acquired sales, SEK 183m organic growth and SEK 7m FX effects; Q4 growth comprised SEK 36m acquired sales, SEK 11m organic growth and SEK 3m FX effects.

• FY free cash flow was SEK 421m, up SEK 180m or 75% YoY; free cash flow per share rose 70% to SEK 1.12.

Outlook and guidance

• Strategic review expected to conclude by end-Q1 2024 and includes plans to clarify refinancing of SEK 900m bonds due October 2024.

• Acquisition evaluation resumed, including selected growth markets and add-on opportunities in Water; potential deals were expected during H1 2024.

• Medium-term targets: average annual EBITA-per-share growth of at least 15%, EBITA margin of at least 12%, and financial net debt/EBITDA no higher than 2.5x.

• Product companies generated 44% of FY2023 EBITA, up from 35% in FY2022 and 21% in FY2021; this share is expected to continue increasing.