Arjo (ARJO) Q2 2024 earnings summary

Executive summary

• Organic net sales grew 3.7% in Q2 2024, with strong service and rental segments driving profitability and margin improvement.

• Adjusted EBIT increased over 10% year-over-year to SEK 232 million, and adjusted EBITDA reached SEK 496 million.

• Cost control measures led to OpEx declining relative to net sales despite inflationary pressures.

• Management changes announced, with ongoing recruitment for key roles.

• Profit after financial items rose to SEK 164 million, and EPS increased to SEK 0.44.

Financial highlights

• Net sales reached SEK 2,810 million in Q2 2024, with organic growth of 3.7%.

• Gross margin improved to 43.6%, up from 42.7% in Q2 2023.

• Adjusted EBIT for Q2 was SEK 232 million, up from SEK 210 million in Q2 2023.

• Adjusted EBITDA grew to SEK 496 million, with a margin of 17.7%.

• Cash conversion was 69.7% in the quarter, with operational cash flow at SEK 344 million.

Outlook and guidance

• Full-year organic net sales growth expected within the 3%-5% target range.

• Gross margin expected to improve year-over-year, with further gains in H2.

• Ongoing activities to improve long-term profitability are progressing as planned.

• Decision not to extend the SEM scanner distribution agreement does not impact growth outlook.