Fagerhult (FAG) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw a return to growth in order intake and net sales, driven by strong performance in renovation projects and urban space solutions, with notable project wins across multiple regions.

• Gross profit margin improved, though operating margin was impacted by higher operating expenses; corrective actions and cost control measures are underway.

• Sustainability and innovation remain core focuses, with a 24% reduction in GHG emissions since 2021 and SBTi-validated climate goals.

• Strategic priorities include renovation, smart lighting, and M&A, with ongoing investments in new product launches.

• Regional variations persist, with Collection and Professional segments showing strong results.

Financial highlights

• Q2 order intake: SEK 2,131 million (+1.1% year-over-year), net sales: SEK 2,167 million (+0.9%), operating profit: SEK 196 million, EBIT margin: 9.1%.

• Q2 EPS: SEK 0.62 (down from 0.68); Q2 net profit: SEK 108.7 million (vs. 119.4 million).

• H1 2024 net sales: SEK 4,347 million (-0.7% year-over-year); operating profit: SEK 417 million (down from 446 million); H1 order intake: SEK 4,233 million (-1.2%).

• Operating cash flow for Q2: SEK 279.1 million (vs. 326.1 million); H1: SEK 393.8 million (vs. 532.5 million).

• Net debt at SEK 2,579 million (adjusted SEK 1,842 million for IFRS 16), net debt/EBITDA ratio 1.94.

Outlook and guidance

• Cost control measures are expected to improve operating margins in H2 2024.

• Anticipate further reduction in net debt and continued strong cash generation.

• Positive outlook for renovation market; new build market expected to recover in 2025, especially in the UK, with early signs of recovery and regional differences.

• Confident in continued growth, supported by megatrends and regulatory tailwinds.

• Well positioned for market recovery and reduced uncertainty, with ongoing growth in renovation projects.