KH Group (KHG) Q2 2024 earnings summary

Executive summary

• Strategic focus on building KH-Koneet as the core business and exiting non-core assets, with HTJ divestment completed in July 2024 to strengthen the balance sheet and enable debt repayment.

• Indoor Group launched a major operational turnaround program targeting €10 million EBIT improvement by end of 2025.

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

• New CEO Ville Nikulainen and CFO Tommi Rötkin started on 1 June 2024.

Financial highlights

• Q2/2024 revenue was €89 million, down from €93 million year-over-year; H1 2024 pro forma net sales were €167.4 million (down from €187.3 million in H1 2023).

• Operating profit was slightly negative at €-0.3 million in Q2 and €-1.8 million for H1; net profit for H1 was €-6.2 million.

• NRG achieved significant growth in both revenue and operating profit, with H1 2024 pro forma net sales of €22.2 million (+18.7% y/y) and operating profit of €1.6 million.

• Indoor Group’s revenue and profitability declined sharply due to a weak furniture market, with H1 2024 pro forma net sales of €74.9 million (down 14.5% y/y) and operating loss of €-3.0 million.

• Group operating cash flow was negative, mainly due to working capital tied up in Indoor and KH-Koneet; net cash flow from operating activities was €-13.6 million.

Outlook and guidance

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

• No improvement in the furniture market is assumed in the outlook; all improvement targets are based on internal efficiency.

• NRG’s order book is strong, with production capacity sold out for 2024 and well into 2025–2026.

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