AQ Group (AQ) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 decreased by 4% year-over-year to SEK 2,254 million, while EBIT rose 9% to SEK 222 million and profit before tax (EBT) increased 11% to SEK 218 million.

• For the first half of 2024, net sales declined 3% to SEK 4,479 million, but EBIT grew 12% to SEK 445 million and EBT rose 16% to SEK 439 million.

• Cash flow from operating activities reached a record SEK 301 million in Q2 and SEK 545 million for H1.

• EPS before dilution was SEK 1.97 in Q2 and SEK 3.98 for H1, with profit after tax at SEK 181 million for Q2 and SEK 366 million for H1.

• Two acquisitions completed: JIT Mech in Sweden and Rockford Components in England, expanding expertise and market reach.

Financial highlights

• EBT margin improved to 9.7% in Q2 and 9.8% for H1, both above the 8% target.

• Equity ratio reached 64% at the end of H1, up from 58% a year earlier.

• Net debt (ex IFRS 16) at SEK -204 million, reflecting strong cash flow and disciplined capital allocation.

• Dividend of SEK 122 million paid and SEK 40 million for JIT Mech acquisition in Q2.

• Return on equity after tax was 17.3% and return on total assets (12 months rolling) was 13.4%.

Outlook and guidance

• Management maintains a 15% growth target and 8% EBT margin goal, with margins expected to remain above 8% long term.

• Organic growth was -6% in Q2, below the 10% annual target, mainly due to declines in Europe and lost business in battery systems.

• High activity in the sales pipeline, but new projects not yet reflected in turnover.

• Expect continued weakness in trucks and construction equipment, with potential for further decline.

• Acquired growth contributed 1.8% in Q2, with further growth expected from Rockford acquisition in H2.