TCM Group Management’s review Interim report Q3 2024 (July 1 - September 30) (All figures in brackets refer to the corresponding period in 2023 – AUBO Production A/S is included in the figures as from 3 July 2023) Organic revenue growth and improved earnings, despite challenging B2B-market condi- tions. CEO Torben Paulin: “Sales in the third quarter developed positively despite the continued weak B2B kitchen market. Organically, sales grew by 7% year-on-year, supported by B2C sales growth of around 20% y-o-y, driven by the strong order intake in Q2 2024. As expected, B2B sales declined in the quarter due to the slowdown in the project sales market. The strong growth in B2C order intake that we experienced in the first 6 months of 2024 slowed down during the summer months, resulting in a largely flat development in B2C order intake in the quarter. This, combined with a negative B2B market, resulted in a small decrease in total order intake in the quarter compared to Q3 2023. Overall revenue in Q3 was DKK 278 million compared to DKK 259 million in Q3 last year. Sales in Denmark, which accounts for more than 80% of the Group revenue, increased organically by 11%, supported by strong growth in sales of third-party products. Gross margin increased to 20.3% in Q3, compared to 17.7% in the same period last year. This improvement was driven by two factors: the normalization of gross margin following last year's downward adjustment of third-party income, and the improved sales mix with higher share of B2C. Adjusted EBIT in Q3 was DKK 17 million compared to DKK 3 million in Q3 last year, and the adjusted EBIT margin was 6.0% compared to 1.0% in Q3 last year. Free cash-flow was DKK 6 million, compared to DKK 18 million last year, where Q3 last year benefitted from net working capital improvements following the acquisition of AUBO Production A/S. Leverage decreased further to 2.78 (down from 3.20 in the previous quarter), well within the agreed covenants. In the third quarter, TCM Group continued to expand its Danish footprint by adding two new Nettoline-branded stores. We narrow the financial outlook for 2024 for the TCM Group with respect to sales and earnings. Our financial outlook for full year revenue for 2024 is now in the range of DKK 1,150-1,200 million (previously DKK 1,125- 1,200 million) with earnings (adjusted EBIT) in the range of DKK 75-90 million (previously DKK 70-90 million). The outlook for adjusted EBIT includes an expected positive effect from adjustment of the contingent considera- tion related to the acquisition of AUBO Production A/S in the range of DKK 8-10 million.” TCM Group A/S, Skautrupvej 16, DK-7500 Holstebro, Company reg. (CVR) no: 37291269 Page 1 of 21
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