Profoto (PRFO) Q2 2024 earnings summary

Executive summary

• Organic sales grew 8% year-over-year in Q2 2024, with net sales reaching SEK 196m, driven by successful new product launches such as Pro-D3 and L1600D, despite a challenging and stagnant market environment.

• EBIT for Q2 was SEK 36m, down from SEK 47m last year, resulting in a margin of 18.5%-19% due to higher marketing and product development costs.

• Profit for the period was SEK 28m, compared to SEK 36m in Q2 2023.

• Double-digit sales growth was achieved in EMEA and APAC regions, while the Americas declined due to tough prior-year comparisons.

• The company remains committed to its long-term targets of at least 10% organic growth and a 25-30% EBIT margin.

Financial highlights

• Net sales for the last twelve months (LTM) were SEK 742m, down 15% year-over-year due to weak market and fewer product launches.

• EBIT LTM was SEK 156m, a 41% decrease year-over-year, with an EBIT margin of 21%.

• Return on operating capital LTM was 34%, down from 65% last year.

• Cash conversion in Q2 was 116%, with cash flow from operating activities at SEK 34m.

• Earnings per share in Q2 were SEK 0.70 (0.89 last year).

Outlook and guidance

• Management expects more product launches in the next 12 months, with continued investments in R&D and market activities.

• Committed to long-term targets of 10% organic growth and 25%-30% EBIT margin, expecting to return to these levels as market conditions improve.

• No significant tough comparisons expected in the next two to three quarters.