Grupa Pracuj S.A (GPP) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 grew by 5.4% year-on-year to PLN 390 million, with adjusted EBITDA at PLN 177 million and a 45% margin.

• Net profit for H1 2024 was PLN 102 million, down 6.8% year-on-year, mainly due to a negative revaluation of Beamery shares; adjusted net profit rose 5.5% year-on-year.

• Growth in Poland was driven by higher recruitment project prices and increased SaaS adoption; Ukraine and Germany also saw strong revenue and profit growth.

• 2Q 2024 revenue was PLN 194 million (+5.0% y/y), adjusted EBITDA PLN 90 million (+0.5% y/y), and net profit PLN 43 million (-28.0% y/y, or -5.2% adjusted).

• The Group completed the acquisition of HRlink sp. z o.o. in January 2024, expanding SaaS recruitment solutions in Poland.

Financial highlights

• Adjusted EBITDA margin was 45% for H1 2024; free cash flow remained stable year-on-year, with cash conversion at 93%.

• Net profit for H1 2024 was PLN 102.4 million, down 6.8% year-on-year; Q2 net profit was PLN 42.7 million, down 28% year-on-year.

• Dividend of PLN 2.00 per share (PLN 136.5 million total) paid in July 2024.

• Cash and cash equivalents increased to PLN 269.3 million as of June 2024.

• German MRR grew over 26% year-on-year in euro terms, but was negatively affected by PLN appreciation.

Outlook and guidance

• Expecting stable year-on-year growth in recruitment projects in Poland, with average price growth of 2%-3% in a conservative scenario and up to 4%-7% in an optimistic scenario.

• Anticipating continued high revenue growth in Ukraine and steady growth in HR Tech SaaS clients and MRR.

• Marketing expenses will remain flexible and tied to revenue growth; salary cost growth is expected to stay at current levels.

• At least one bolt-on acquisition is targeted in the next 12 months, with a focus on synergies in core markets.

• Management expects Ukrainian subsidiaries to remain operational and cash-generative despite ongoing conflict.