Desenio Group (DSNO) Q2 2024 earnings summary

Executive summary

• Net sales declined 10% year-over-year to SEK 166 million in Q2 2024 amid weak demand and challenging market conditions.

• Profitability improved with EBITA up 31.5% to SEK 6.3 million and EBITA margin rising to 3.8% from 2.6% year-over-year.

• Cash flow from operating activities was negative at SEK -48 million, mainly due to lower sales, reduced current liabilities, and interest payments.

• The company is actively exploring refinancing options for its SEK 1.1 billion bond maturing in December 2024, with ongoing discussions with bondholders.

• Cost control measures and operational efficiencies have improved margins despite market headwinds.

Financial highlights

• Gross margin slightly decreased to 83.6% from 84% year-over-year, mainly due to product mix.

• Fulfillment cost ratio improved to 27.8% from 29.6%, and admin expenses fell to SEK 34.1 million.

• Marketing cost as a percentage of net sales reduced to 30.4% from 32.1% year-over-year.

• Net interest payments on bonds totaled SEK 25.6 million in the quarter.

• Earnings per share in Q2 was SEK -0.16, compared to SEK -0.12 last year.

Outlook and guidance

• For full year 2024, net sales are expected to decrease by 5–10% versus 2023, with an adjusted EBITA margin of 11–13%.

• For 2025, net sales growth of 0–5% and adjusted EBITA margin of 11–14% are anticipated.

• Updated medium-term targets: organic annual net sales growth above 5% and adjusted EBITA margin above 15%.

• Dividend policy remains unchanged.