Röko (RÖKO) Q2 2024 earnings summary

Executive summary

• Net sales for H1 2024 reached SEK 3,066m, up 10% year-over-year, with Q2 net sales at SEK 1,511m, up 8% from Q2 2023.

• Adj. EBITA for H1 2024 was SEK 635m, up 15–16% year-over-year, with a margin of 21% (up 1 p.p.).

• Net profit for H1 2024 was SEK 383m, up 38% year-over-year; EPS increased 25% in H1.

• Röko completed three acquisitions in H1 2024, including its first in Germany, all financed with cash.

• The portfolio expanded to 26 companies and 1,468 employees as of June 2024.

Financial highlights

• Organic growth for H1 2024 was 3%, compared to 1% in H1 2023; Q2 organic growth was 3% in SEK and 1% in local currency.

• Interest-bearing net debt decreased to SEK 484m from SEK 987m in H1 2023.

• Return on capital employed (ROCE) improved to 13–14% in H1 2024 from 11% in H1 2023.

• Cash conversion remained strong, and equity/assets ratio increased to 51% from 44% year-over-year.

• Operating profit for H1 2024 was SEK 514m.

Outlook and guidance

• Financial targets include annual EBITA growth (excluding acquisitions) and maintaining an EBITA margin above 15%.

• Net debt/EBITDA RTM target is below 3.0x, with temporary exceedance allowed for acquisitions.

• Dividend policy is to distribute 0–20% of net profit; no dividend was paid for 2023.

• Strong financial position and low leverage enable further acquisitions, though M&A market volatility may limit near-term opportunities.