Synsam Group (SYNSAM) Q3 2024 earnings summary

Executive summary

• Organic growth reached 9.5% in Q3 2024, up from 7.0% year-over-year, reflecting consistent strategy execution and improved market position despite a challenging consumer environment and increased competition in the Nordics.

• Net sales increased by 7.6% to SEK 1,559 million in Q3, with EBITDA up 2.1% to SEK 381 million, though the margin declined to 24.1% due to campaign-driven growth and higher establishment costs.

• 32 new stores opened year-to-date, with the establishment rate ahead of schedule and 10 stores opened in Q3.

• Subscription businesses, including Synsam Lifestyle and contact lens subscriptions, showed double-digit growth in both revenue and customer base, with the active Synsam Lifestyle base up 15% to 683,000 and stable churn at 2.60%.

• Profit after tax for Q3 was SEK 66 million, down from SEK 90 million, mainly due to higher financial expenses and tax rate.

Financial highlights

• Q3 gross margin was 73.9% (down from 74.9% year-over-year); EBITDA margin was 24.1% (down from 25.2%).

• Earnings per share for Q3 were 0.44 SEK, down from 0.61 SEK year-over-year.

• Year-to-date net sales rose 8.5% to SEK 4,804 million, with EBITDA up 10.6% to SEK 1,208 million and margin at 24.9%.

• Cash flow from operating activities in Q3 was SEK 238 million (up from SEK 104 million).

• Q3 EBITA was SEK 220 million (down 0.9%), and EBIT was SEK 187 million (up 1.8%).

Outlook and guidance

• Store expansion is ahead of schedule, with 32 new stores YTD and a goal of 90 stores for 2024–2026, with 46–48 expected by year-end 2024.

• The majority of the new cost program's impact is expected in 2025, with management expecting positive effects from the expanded customer base and improved market position.

• Anticipates that interest rate cuts will boost consumer willingness to spend on higher-priced products.