Crayon Group (CRAYN) Q2 2024 earnings summary

Executive summary

• Achieved 13% gross profit growth in Q2 2024 to NOK 1,737m, with adjusted EBITDA up 17% to NOK 412m and margin improving to 24%.

• Net working capital reached a record -NOK 1.4 billion, marking the third consecutive quarter of improvement and reflecting strong cash flow management.

• Upgraded full-year outlook based on sustainable improvements in profitability and working capital.

• Recognized as 2024 Microsoft Partner of the Year for Scale Solutions, highlighting global leadership in IT services.

• Long-term financing completed, reducing net interest-bearing debt and improving liquidity.

Financial highlights

• Q2 2024 gross profit: NOK 1,737m (+13% YoY); adjusted EBITDA: NOK 412m (+17% YoY); adjusted EBITDA margin: 24% (up 1pp YoY).

• Net income was NOK 134m, up from NOK 68m last year; basic EPS at NOK 1.40 (NOK 0.69 in Q2 2023).

• Revenue: NOK 18,167m (+18% YoY); operating expenses: NOK -1,343m.

• Cash flow from operations reached NOK 599m, a significant increase from NOK 158m in Q2 2023.

• Net debt/EBITDA ratio ended at 0.7, with a liquidity reserve of NOK 3.2 billion including undrawn credit facilities.

Outlook and guidance

• Upgraded FY 2024 net working capital outlook to -5% to -12.5% of gross profit.

• Gross profit growth expected at 18–20% for 2024, in line with medium-term outlook.

• Targeting 18%-20% adjusted EBITDA margin for the year, with gradual increase to 25% medium-term.

• H2 expected to be the strongest half, especially in software and cloud licensing, with ramp-up in consulting and services.

• Continued focus on profitability and working capital management is expected.