Storskogen Group (STOR) Q3 2024 earnings summary

Executive summary

• Q3 net sales declined 4% year-over-year to SEK 7,991 million, but adjusted EBITA rose 8% to SEK 783 million, with margin improving to 9.8% from 8.7%.

• Profit for Q3 increased to SEK 256 million from SEK 170 million, and basic EPS rose to SEK 0.13 from SEK 0.09.

• Divestment of nine low-performing or unprofitable business units completed, supporting profitability and margin expansion.

• S&P affirmed BB credit rating, improving outlook from negative to stable; successful bond refinancing extends major maturities to 2027.

• Positive organic sales and EBITA growth in Q3, with margin improvement driven by divestments and operational efficiency gains.

Financial highlights

• Q3 adjusted EBITA margin improved to 9.8% (8.7% last year); operating margin rose to 7.6% (5.9%).

• Adjusted EPS after dilution SEK 0.13, up 35% year-over-year.

• Cash conversion (LTM) at 99%, well above target; leverage ratio stable at 2.6x.

• Profit before tax increased 68% year-over-year; net profit up 31%.

• Interest-bearing net debt/adjusted RTM EBITDA at 2.6x, within target range.

Outlook and guidance

• All business areas achieved positive organic sales growth in Q3, with continued focus on cash flow, profitability, and leverage improvement.

• Q4 expected to be seasonally stronger, though market uncertainties persist.

• No significant bond maturities until 2027, providing operational flexibility.

• Market recovery expected to be gradual, with further support anticipated from interest rate cuts.

• Capital allocation for value-creating acquisitions will be prioritized once organic profit growth and leverage improve.