HAKI Safety (HAKI) Q4 2023 earnings summary

Executive summary

• Q4 net sales rose 4% to SEK 271 M, with 3% organic growth; EBITA rebounded to SEK 15 M from SEK -15 M and operating cash flow reached SEK 71 M.

• FY net sales increased 2% to SEK 1,188 M, despite a 12% organic decline; EBITA improved to SEK 90 M, while net profit fell to SEK 62 M from SEK 71 M.

• Profitability improved in Q4 on stronger gross margin and cost savings; the full-year net result was weighed down by higher interest expense.

Financial highlights

• Q4 gross profit was SEK 90 M (74); gross margin was 33.2% (28.4%), supported by improved pricing against input costs and cost-saving programs.

• Q4 EBITA was SEK 15 M (-15), with a 5.5% margin (-5.6%); restructuring costs reduced the result by SEK 5 M (11).

• FY gross profit was SEK 397 M (362), gross margin 33.4% (31.0%), and EBITA SEK 90 M (84), with a 7.6% margin (7.2%).

• FY operating profit was SEK 99 M (102); net profit was SEK 62 M (71), including higher interest expense, and diluted EPS was SEK 2.24 (2.57).

• Q4 net profit was SEK 7 M (-10); diluted EPS was SEK 0.25 (-0.36), and operating cash flow was SEK 71 M (-16).

Outlook and guidance

• New investments are being approached conservatively amid current market conditions; working-capital and inventory reduction efforts continue to support lower net debt.

• Q1 2024 comparisons may be challenging because of large customer orders sold in early 2023; geopolitical and economic uncertainty cloud the market outlook.

• The core market for safety products and solutions at temporary workplaces is viewed as having positive long-term prospects.