Elanders (ELAN) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were SEK 3,503 million, flat organically versus Q2 2023, with organic growth unchanged year-over-year, marking an improvement from Q1's 9% decline.

• Adjusted EBITA margin for Q2 2024 was 6.1%, matching last year and improving from Q1; adjusted EBITA was SEK 215 million.

• Demand showed recovery in Q2, especially in Electronics and Health Care, but Fashion and Automotive segments remained weak.

• Secured a major contract with a leading electronics customer, enabling expansion into Thailand and supporting Southeast Asia growth strategy.

• One-off items of SEK -73 million in H1 and SEK -47 million in Q2 impacted results, mainly due to structural measures in the USA and severance pay.

Financial highlights

• EBITDA for Q2 2024 was SEK 500 million, up from SEK 479 million in Q2 2023.

• Operating cash flow excluding acquisitions for Q2 2024 was SEK 516 million, with cash conversion at 103.2%.

• Working capital reduced by SEK 264 million in H1 2024, following a SEK 370 million reduction in 2023.

• Net debt at the end of Q2 2024 was SEK 9,030 million, up from SEK 7,449 million a year earlier, mainly due to acquisitions.

• Adjusted earnings per share for Q2 2024 were SEK 0.99, compared to SEK 2.21 in Q2 2023.

Outlook and guidance

• Gradual demand improvement expected in H2 2024, with continued recovery in Electronics and Health Care, but market uncertainty persists.

• High focus on new sales, cost optimization, and reducing net debt through working capital and investment management.

• Annual savings of USD 3.5 million expected from US warehouse consolidation, with full effect from 2025.

• No formal forecast for 2024 was provided.

• Slightly lower expectations for H2 recovery compared to Q1, with improvement expected but at a slower pace.