SP Group (SPG) Q3 2023 earnings summary

Executive summary

• 9M 2023 revenue declined 2.7% to DKK 1,953.2m; EBITDA fell 8.6% to DKK 323.9m and EBT fell 35.4% to DKK 131.0m. FY guidance was maintained.

• Customer inventory adjustments, higher interest rates and weaker macroeconomic activity weighed on sales and earnings; growth in coming quarters is expected from customer projects in development.

Financial highlights

• 9M revenue was DKK 1,953.2m vs DKK 2,007.5m; Q3 revenue was DKK 583.0m vs DKK 607.1m.

• 9M EBITDA was DKK 323.9m vs DKK 354.4m; EBIT was DKK 171.9m vs DKK 220.7m. Q3 EBITDA declined DKK 11.0m, or 10.5% YoY.

• 9M EBT was DKK 131.0m vs DKK 202.9m; net income was DKK 102.3m vs DKK 160.1m and diluted EPS was DKK 8.38 vs DKK 13.12.

• Operating cash flow rose to DKK 288.6m from DKK 210.2m; investing cash outflow was DKK 120.2m vs DKK 198.6m.

Outlook and guidance

• FY 2023 guidance maintained: revenue growth of 0–10%, EBITDA margin of 16–19% and EBT margin of 7–10%.

• New solutions for healthcare, cleantech and food-related industries are expected to support growth; renewed wind-industry growth is anticipated in coming years.

• Investment levels are expected to remain high in 2023, with healthcare the largest planned investment area; depreciation and financial expenses are expected above 2022 levels.