KH Group (KHG) Q2 2024 earnings summary

Executive summary

• Pro forma revenue for Q2/2024 was €89.3 million, down from €93.2 million year-over-year, with a pro forma operating loss of €0.3 million compared to a €0.2 million profit last year.

• Net sales for H1 2024 were EUR 167.4 million, down 10.6% year-over-year on a pro forma basis; operating profit was EUR -1.8 million, with a net loss of EUR -6.2 million.

• HTJ was sold at a favorable price, generating a €13.1 million cash inflow used to repay bank loans and support strategic changes.

• Leadership changes include a new CEO and CFO, with ongoing strategic transformation and operational improvements.

Financial highlights

• Group revenue decreased by 4% and operating profit declined by €0.5 million compared to Q2/2023.

• Pro forma net sales for H1 2024: EUR 167.4 million (down from EUR 187.3 million in H1 2023); pro forma EBITDA: EUR 15.8 million (9.4% margin); pro forma operating profit: EUR -0.8 million.

• IFRS net sales: EUR 167.4 million; operating profit: EUR -1.8 million; net profit: EUR -6.2 million.

• KH-Koneet grew revenue by 2% and maintained profitability; NRG saw significant growth in both revenue and operating profit.

• Indoor Group's revenue fell 16% and operating profit dropped by €1.1 million year-over-year.

Outlook and guidance

• Updated 2024 guidance: pro forma revenue/net sales expected at €340–360 million and operating profit at €4–7 million, revised downward due to Indoor Group's weak performance.

• Indoor Group is implementing cost-saving and operational improvement measures targeting at least €10 million annual improvement by 2026.

• Strategic focus remains on building an industrial group around KH-Koneet and divesting other business areas.

• Market conditions remain challenging, especially for Indoor Group, but demand is expected to recover faster in Sweden than Finland.