TCM Group (TCM) Q3 2024 earnings summary

Executive summary

• Organic revenue grew 7–7.4% year-over-year in Q3 2024, reaching DKK 277.7–278 million, driven by strong B2C sales, while B2B/project sales declined due to a weak project market.

• B2C revenue increased 20% year-over-year, with Denmark accounting for 81.9–82% of group revenue and growing 10.5%.

• Opened two new Nettoline branded stores in Denmark during Q3, bringing the total to 114 branded stores in Denmark and Norway.

• Focused on regaining B2C market share amid macro-driven B2B demand decline.

• Gross margin improved to 20.3% from 17.7% year-over-year, aided by a favorable sales mix and normalization after prior adjustments.

Financial highlights

• Q3 revenue was DKK 277.7–278 million (+7–7.4% year-over-year); adjusted EBIT reached DKK 16.7–17 million (Q3 2023: DKK 2.5–3 million), with a margin of 6.0% (vs. 1.0%).

• Free cash flow in Q3 was DKK 6 million (vs. DKK 17.5–18 million last year), with CapEx ratio reduced to 0.6%.

• Net interest-bearing debt reduced to DKK 329–329.4 million from DKK 417–417.3 million year-over-year.

• Leverage ratio improved to 2.78–2.8 (from 5.2), and net working capital ratio was -0.1% (down from 3.8%).

• Cash conversion ratio over 12 months was 120.6–121%.

Outlook and guidance

• Full-year 2024 net revenue guidance narrowed to DKK 1,150–1,200 million (previously DKK 1,125–1,200 million); adjusted EBIT guidance raised to DKK 75–90 million (previously DKK 70–90 million), including a DKK 8–10 million positive effect from AUBO acquisition adjustments.

• B2B/project sales expected to continue declining in Q4 2024, with recovery not anticipated until well into 2025.

• Q4 underlying earnings expected to be softer due to spillover from weak Q3 order intake.

• Revenue classification change reduces reported revenue by DKK 20–25 million annually; historical figures restated.