Kjell Group (KJELL) Q2 2024 earnings summary

Executive summary

• Net sales increased 4.6% to MSEK 594.4 in Q2 2024, with all segments and markets showing growth, notably Norway at 17.3% year-over-year.

• Adjusted EBITA improved to MSEK 0.3 from MSEK -2.3, reflecting efficiency measures and cost control.

• Net profit remained negative at MSEK -18.4, slightly lower than MSEK -17.9 in Q2 2023.

• Gross margin declined to 40.8% from 42.9% due to increased sales of external brands and product mix effects.

• Efficiency programs and operational improvements reduced financial net debt and improved cash flow.

Financial highlights

• Q2 net sales: MSEK 594.4 (up 4.6%); H1 net sales: MSEK 1,185.8 (up 3.4%).

• Q2 gross profit: MSEK 242.4 (down 0.7%); gross margin: 40.8% (down from 42.9%).

• Cash flow from operating activities Q2: MSEK 13 (up from MSEK -9 in Q2 2023); H1: MSEK 8.1 (vs. -28.8).

• Financial net debt decreased by MSEK 139 year-over-year, but increased by MSEK 27 quarter-over-quarter.

• EPS Q2: SEK -0.59; H1: SEK -1.29.

Outlook and guidance

• Management expects continued positive effects from efficiency initiatives and product mix improvements.

• Anticipates further margin strengthening and is optimistic for the remainder of 2024.

• Financial targets: net sales of at least SEK 4 billion by 2025, adjusted EBITA margin of 8% medium term, net debt/adjusted EBITDAaL below 2.5x, and dividend payout of at least 60% of net profit when conditions allow.

• Market climate is gradually improving, with technological trends like 5G and AI expected to drive accessory sales.