Coor Service Management (COOR) Q3 2024 earnings summary

Executive summary

• Key contracts were extended and new wins secured across Sweden, Norway, and Denmark, including a six-year IFM contract in Sweden worth SEK 780 million and an 18-month extension with Danish Police.

• Staff reductions of about 70 employees were implemented in Denmark and Sweden due to lower demand for variable volumes, with SEK 27 million in restructuring costs recognized.

• Integration of Skaraborgs Städ completed, and action programs for margin improvement and cost savings continue.

• High customer satisfaction and employee engagement, with recognition for gender equality and sustainability initiatives.

• No acquisitions or divestments in Q3 2024; share buyback program in place to support incentive plans.

Financial highlights

• Net sales for Q3 2024 were SEK 2,943 million, down 2% year-over-year; Q2 2024 net sales were SEK 3,180 million, nearly flat year-over-year.

• Adjusted EBITA for Q3 2024 was SEK 120 million (margin 4.1%); Q2 2024 adjusted EBITA was SEK 161 million (margin 5.1%).

• Net income for Q3 2024 was SEK 17 million; Q2 2024 net income was SEK 60 million.

• Cash conversion for the last 12 months was 77%, below the >90% target; Q2 2024 LTM cash conversion was 92%.

• Leverage at 2.7x adjusted EBITDA, in line with target; equity/assets ratio at 21% at period end.

Outlook and guidance

• Market outlook for Nordic facility management remains favorable, with a strong pipeline and continued opportunities, especially in Sweden and Norway.

• Full effect of margin improvement actions expected by year-end, though financial impact is taking longer than planned.

• No further significant restructuring costs expected in Q4; cost base adjusted for lower variable volumes.