Karnell Group (KARNEL) Q3 2024 earnings summary

Executive summary

• Achieved record-high EBITA margin of 15.4% in Q3 2024, meeting medium-term financial goals.

• Net sales in Q3 2024 rose 37.1% year-over-year to SEK 356.6 million, with organic growth of 4.8%.

• Completed two major strategic acquisitions: NE Engineering (UK) and Haco/Haku (Sweden), expanding presence and portfolio.

• Strong cash flow from operating activities, up 49% LTM from Q3 2023, and maintained low leverage.

• All portfolio companies contributed positively, with Q3 emerging as a strong quarter across the group.

Financial highlights

• Q3 net sales: SEK 356.6 million (up 37.1% year-over-year); EBITA: SEK 54.9 million (up 45.4%); EBITA margin: 15.4%.

• Organic revenue growth was 4.8–5%; acquisitions contributed 34% to sales growth.

• Cash flow from operating activities in Q3: SEK 45.5 million (up 517%); Jan–Sep: SEK 88.0 million (up 81%).

• Net profit after tax in Q3: SEK 29.1 million (down 6%); Jan–Sep: SEK 47.1 million (down 29%).

• Net sales CAGR of 55% and EBITA CAGR of 71% for Q3 2021–2024.

Outlook and guidance

• Market outlook remains stable, with lower inflation and decreasing interest rates boosting investment confidence, especially in construction.

• Expectation of continued strong performance, leveraging low debt, robust cash flow, and a healthy M&A pipeline.

• Management sees positive trends in construction and industrial sectors, with a strong balance sheet supporting further acquisitions and organic growth.

• Tax rate expected to gradually decrease over time due to improved group structure.

• Cautious optimism for the rest of the year, especially in Niche production, as some recovery signals emerge.