Alligo (ALLIGO) Q3 2024 earnings summary

Executive summary

• Revenue grew 1.0% in Q3 2024 to SEK 2,143 million, driven by acquisitions, while organic growth was -3.0% due to weak demand, especially among SMEs and in construction; oil & gas demand remained stable.

• Adjusted EBITA/EBITDA fell to SEK 137 million (6.4% margin), down from SEK 191 million (9.0% margin) last year, reflecting margin pressure and unfavorable customer mix.

• Eight to ten acquisitions completed in 2024, adding up to SEK 500 million in annualized sales, with a strong focus on the welding segment and expansion in the Nordics.

• Cash flow from operating activities improved to SEK 116 million in Q3, supported by inventory reductions and procurement improvements.

• Market remains weak, especially among SMEs, but positive signals are emerging and management is focused on cost efficiency, strategic acquisitions, and new service offerings.

Financial highlights

• Q3 2024 revenue: SEK 2,143 million (+1.0% YoY); organic growth -3.0%; acquired growth 4.8%.

• Adjusted EBITA/EBITDA: SEK 137 million (Q3 2024), down from SEK 191 million (Q3 2023); margin 6.4% (9.0%).

• Gross margin: 40.5% (41.6% Q3 2023); YTD: 40.6% (40.7%).

• Operating cash flow improved to SEK 116 million in Q3, and SEK 514 million for 9M.

• Net debt/EBITDA: 2.2x at period end; equity/assets ratio: 39–45.3%.

Outlook and guidance

• Market stabilization is observed, but no significant upturn is expected in Q4; similar trends to Q3 anticipated.

• Management expects gradual recovery in customer mix and margins through 2025, with continued focus on acquisitions, own brands, and growth initiatives.

• Leverage expected to improve by year-end, with Q4 being seasonally strongest.

• Climate targets to be set in line with SBTi and sent for validation in Q4 2024.