Alligo (ALLIGO) Q2 2024 earnings summary

Executive summary

• Revenue increased by 1.8% year-over-year to 2,432 MSEK, mainly due to acquisitions, while organic growth declined by 3.2% amid weak demand, especially among SMEs; oil and gas in Norway showed strength.

• Seven acquisitions were completed or signed in Q2, adding about SEK 300 million in annual turnover, 77 employees, and 13 stores, with a focus on consolidating the welding and workwear markets.

• Adjusted EBITA/EBITDA fell to SEK 166 million (margin 6.8%), down from SEK 201 million (8.4%) year-over-year, reflecting lower volumes and negative customer mix; cost reduction programs achieved SEK 100 million in annual savings.

• Cost savings, price adjustments, and new product launches partly offset margin pressure; logistics investments and new service launches continued.

• Dividend of SEK 3.50 per share was approved, up from SEK 3.00, representing 35% of earnings per share.

Financial highlights

• Q2 revenue: SEK 2,432 million (+1.8% year-over-year); organic growth -3.2%, acquisition-driven growth +3.1%.

• Adjusted EBITA/EBITDA: SEK 166 million (down from 201 million); margin 6.8% (down from 8.4%).

• Gross margin: 40.3% (down from 40.9%); operating cash flow: SEK 270 million (down from 287 million); net profit: SEK 87 million (down from 124 million).

• Net debt/EBITDA: 2.0x, within target range; equity/assets ratio: 39%.

• Cash and unutilized credit facilities: SEK 1,150 million at period end.

Outlook and guidance

• Management expects continued market weakness in the near term but is preparing for an eventual upturn, focusing on cost control, margin management, and continued acquisitions.

• Some positive signals are emerging from large industrial customers in Finland, with expectations of higher production in the autumn.

• The company will continue to pursue acquisitions, invest in organic growth, and set climate targets in line with SBTi.