Orthex (ORTHEX) Q2 2024 earnings summary

Executive summary

• Net sales grew 5.9% year-over-year to €43.0 million in H1 2024, with Q2 net sales up 4.3%, driven by strong Nordic and European performance and commercial activities.

• Storage and Kitchen categories led growth, with Storage up 7.6% and Kitchen up 7.4% in H1 2024.

• Strategic focus remains on category leadership, sustainability, and expanding the European footprint, with investments in recycled materials and carbon neutrality by 2030.

• Profitability declined due to higher fixed costs and absence of last year's one-time energy compensation, but comparable EBITA improved by 16%.

• Growth was balanced in Europe outside the Nordics, with careful consumer and retailer behavior noted.

Financial highlights

• H1 2024 net sales: €43.0m (up 5.9%); Q2 net sales: €21.0m (up 4.3%).

• Adjusted EBITA for H1: €4.3m (down from €4.5m); Q2 adjusted EBITA: €1.6m (down from €2.1m); adjusted EBITA up 16% excluding last year's one-off.

• Gross margin improved to 28.7% in H1 (from 26.0%) and 27.0% in Q2 (from 25.6%).

• Leverage (net debt/adjusted EBITDA) improved to 1.6 from 2.0 year-over-year.

• Net debt at period end was €23.1m; cash and equivalents at €8.8m.

Outlook and guidance

• Confident in strategy to accelerate growth in Europe, with expectations for further sales acceleration and long-term net sales growth above 5%.

• EBITA margin target is above 18% over time; current margin is 10.0%.

• Dividend payout ratio at 54.1%, with payments split between April and October.

• Leverage target is below 2.5x; current leverage is 1.6.