Colt CZ Group (CZG) Q2 2024 earnings summary

Executive summary

• Achieved record H1 2024 revenues of CZK 9,690m (up 41.2% y-o-y) and adjusted EBITDA of CZK 1,981m (up 35.3% y-o-y), driven by Sellier & Bellot acquisition and US market recovery.

• Sellier & Bellot acquisition completed in May 2024 for USD 703m, expanding the product portfolio and group scale.

• Adjusted net profit declined 15.3% y-o-y to CZK 1,015m, mainly due to financial results and one-off adjustments.

• Results exceeded half-year guidance, with strong Q2 performance and new contracts, including technology transfer to Ukraine.

• Board of Directors strengthened with appointment of Radek Musil to represent the ammunition segment.

Financial highlights

• Revenues increased 41.2% y-o-y to CZK 9,690m; adjusted EBITDA rose 35.3% to CZK 1,981m, both exceeding guidance.

• Adjusted EPS was CZK 25 (down 28.4% y-o-y), impacted by share issuance and S&B acquisition effects.

• Profit before tax fell 41.2% to CZK 794.8m; net profit dropped 41.7% to CZK 609.6m due to acquisition costs and higher depreciation.

• Q2 2024 was the strongest quarter in company history, with units sold up 2.8% y-o-y and organic firearms revenue up 26.6%.

• Total assets increased 79.8% to CZK 46.7bn; net financial debt rose to CZK 15.6bn (net leverage ratio 3.16x).

Outlook and guidance

• FY 2024 guidance confirmed: revenues CZK 20,000–22,000m post-S&B consolidation, up to CZK 25bn pro-forma; adjusted EBITDA expected at CZK 3,300–3,800m, up to CZK 5.6bn pro-forma.

• High quarterly seasonality anticipated in H2 2024, with Q4 expected to outperform Q3.

• Capital expenditures for 2024 expected at CZK 1–1.2bn (approx. 5% of expected revenues).

• Outlook subject to global demand, inflation, FX rates, and S&B integration.