Europris (EPR) Q3 2024 earnings summary

Executive summary

• Group sales rose 50.4% year-over-year in Q3 2024 to NOK 3.2 billion, driven by the ÖoB acquisition and 4.4% organic growth.

• Gross margin declined to 39.7%, mainly due to lower-margin ÖoB and campaign-driven sales.

• EBIT fell to NOK 168 million, down NOK 67 million, with a NOK 45 million EBIT loss in Sweden and a NOK 22 million organic decline in Norway.

• Net profit attributable to parent was NOK 84 million, down NOK 60 million year-over-year, impacted by negative EBIT from ÖoB and unrealized losses on interest rate swaps.

• Integration of ÖoB is progressing as planned, with harmonization of assortment, joint sourcing, and operational upgrades underway.

Financial highlights

• Q3 2024 group sales: NOK 3.2 billion (+50.4%); organic growth: 4.4%.

• Gross margin: 39.7% (down 4–5.6 percentage points); organic decline: 1.6 percentage points.

• EBIT: NOK 168 million (down NOK 67 million year-over-year); organic decline: NOK 22 million.

• Net profit: NOK 84 million (down NOK 60 million year-over-year); impacted by unrealized losses on interest rate swaps.

• Cash from operating activities was NOK 365 million, down from NOK 734 million last year, mainly due to inventory build-up and working capital changes.

Outlook and guidance

• The group is fully stocked and prepared for the Christmas season, expecting significant growth.

• Inflation and interest rates are easing, with positive outlooks for real wage increases and stable unemployment in Norway and Sweden.

• Long-term target for ÖoB is SEK 5 billion in sales and a 5% EBIT margin by 2028.

• OPEX growth in Norway is expected to end below the previously guided 10%.

• Gross margin is expected to remain above pre-pandemic levels over time, though current mix and campaign share are dilutive.