Gränges (GRNG) Q2 2024 earnings summary

Executive summary

• Achieved record adjusted operating profit of SEK 471 million in Q2 2024, up 4.7% year-over-year, driven by strong sales focus, new business, and productivity improvements despite muted but stable market demand.

• Sales volume increased 9% year-over-year to 131,000 tons, reflecting successful new business efforts and normalization in key markets.

• Sustainability milestones reached: recycled aluminum input nearing 50%, record-high recycling volumes, and record-low carbon emissions intensity, meeting 2025 climate goals ahead of schedule.

• Entered a strategic, equity-based partnership in Shandong, China, expanding capacity without cash impact, expected to contribute positively to EPS from 2025.

Financial highlights

• Net sales rose by 2.3% to SEK 6,145 million in Q2 2024, lagging volume growth due to lower average fabrication prices.

• Adjusted operating profit reached SEK 471 million, SEK 61 million higher than Q2 2023 when excluding a SEK 40 million one-off effect.

• Profit for the period was SEK 314 million, with EPS at 2.94 SEK, nearly flat year-over-year due to absence of prior year tax one-offs.

• Adjusted cash flow before financing activities fell to SEK 399 million from SEK 779 million in Q2 2023.

• Net debt stable at SEK 3,031 million; net debt/EBITDA at 1.3x, within target range.

Outlook and guidance

• Expect mid-to-high single-digit percentage sales volume growth in Q3 2024 versus Q3 2023, with continued focus on new business and productivity to offset price and wage pressures.

• Market environment seen as stable but with subdued growth; guidance unchanged from previous quarter.

• Strategic partnership in China expected to be EPS accretive from 2025, with gradual ramp-up of new capacity.