Puuilo (PUUILO) Q2 2022 earnings summary

Executive summary

• H1 net sales €148.1m, up 7.2% YoY; like-for-like sales grew 2.4%, with stronger momentum in Q2.

• Q2 net sales rose 11.9% to €89.2m; like-for-like sales increased 7.9%, driven mainly by higher customer traffic.

• Adjusted EBITDA was €24.2m in H1, or 16.4% of net sales, down €1.3m; Q2 adjusted EBITDA was €18m, or 20.2% of sales.

Financial highlights

• H1 gross margin was 35.9%, down 1 percentage point YoY; higher purchase prices and transport and warehousing costs weighed on margin.

• Q2 operating expenses were well controlled; higher sales and absolute gross profit supported stronger adjusted EBITDA.

• Operating free cash flow increased €17.4m in H1; Q2 cash flow rose €21.1m to €29.6m, helped by EBITDA and working-capital improvement.

• Online sales declined 4.6% in H1 against a strong prior-year comparison, when online sales grew 33%.

Outlook and guidance

• FY2022 net sales are expected to increase YoY, with growth below the long-term annual target of 10%; adjusted EBITDA guidance was raised to €40m–€50m.

• Like-for-like sales are expected to remain positive for the rest of the year, while full-year total sales growth is expected to remain below 10%.

• Gross margin is expected to stabilize around the H1 level for the rest of the year; no separate margin forecast was given.

• Long-term targets remain net sales above €100m by FY2025 and adjusted EBITDA margin of 17%–19%.

• Two stores are planned by FY-end, with four additional openings planned in 2023; further 2024–2025 site negotiations are underway.