Storskogen Group (STOR) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were SEK 9,243 million, down 2% year-over-year, with adjusted EBITA at SEK 894 million, down 3%, and margin steady at 9.7%. Profit for the quarter was SEK -671 million, impacted by SEK -995 million in items affecting comparability from divestments and impairments.

• Strategic divestment of nine business units completed, improving profitability, reducing earnings volatility, and resulting in significant non-cash impairments.

• Organic sales growth was 2%, with margin improvement matching previous years, supported by efficiency measures.

• CEO and CFO presented results, with permanent CEO and EVP appointments finalized post-period.

• Cash flow from operations remained strong, and leverage ratio stayed within target range.

Financial highlights

• Q2 net sales: SEK 9,243 million (-2% YoY); adjusted EBITA: SEK 894 million (-3% YoY); margin: 9.7% (unchanged); adjusted net profit up 21% YoY; adjusted EPS SEK 0.16 (from 0.13).

• Reported profit for the period: SEK -671 million, impacted by SEK -995 million in items affecting comparability from divestments.

• Cash flow from operating activities was SEK 855 million for Q2 and SEK 3 billion to SEK 4,185 million for the rolling twelve months.

• Free cash flow after leasing for the last twelve months was SEK 1.9 billion.

• Interest-bearing net debt/adjusted RTM EBITDA: 2.7x, within target range.

Outlook and guidance

• Q3 expected to be seasonally softer due to summer holidays, with a pickup anticipated in Q4.

• Focus remains on organic EBITA/EBITDA growth, cost base adaptation, and expanding service offerings.

• Efficiency measures and cost controls are expected to yield further positive effects in H2 2024, with early signs of improved consumer confidence.

• Interest rate cuts and operational initiatives are expected to support improved market sentiment, though effects may be gradual.

• Cautious optimism about market sentiment and consumer confidence, with potential boosts from interest rate cuts.