MEKO (MEKO) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 7% year-over-year to SEK 4,396M, with 2% organic growth and strong performance in Sweden-Norway; Denmark softer, Finland weak, and Poland highly competitive.

• Adjusted EBIT for Q3 increased 10% to SEK 322M, with margin up to 7.2%; reported EBIT benefited from SEK 176M negative goodwill and SEK 101M impairment, netting a SEK 75M positive effect.

• Integration of Elit Polska completed, adding 50 branches and 2 warehouses, contributing to revenue but temporarily diluting group gross margin.

• Multiple automated warehouse projects are progressing on schedule, with major launches planned in Norway, Denmark, Poland, and Finland by 2025.

• Awarded AAA ESG rating by MSCI, placing among the top 11% of comparable companies globally.

Financial highlights

• Q3 2024 net sales rose 7% year-over-year to SEK 4,396M; 9M 2024 net sales up 8% to SEK 13,396M.

• Q3 EBIT rose 15% to SEK 345M; adjusted EBIT up 10% to SEK 322M; EBIT margin improved to 7.4%.

• Earnings per share for Q3 increased 30% to SEK 4.03; 9M EPS up 3% to SEK 7.81.

• Net debt reduced to SEK 2,445M from SEK 2,900M a year ago; net debt/EBITDA at 2.5x, within target range.

• Cash flow from operating activities for Q3 was SEK 178M, down from SEK 600M last year; available cash and unutilized credit facilities at SEK 2,382M.

Outlook and guidance

• Preparing for launch of four new central warehouses in Norway, Denmark, Poland, and renovation in Finland by 2025.

• Strategic warehouse investments and integration of Elit Polska are expected to support continued profitable growth.

• 2025 is anticipated to be an intense launch year, with major logistics projects nearing completion.

• Polish market expected to see further consolidation and M&A activity over the next 2-3 years.

• Price increases likely to stabilize; future gross margin improvements to come from procurement and scale.