ECIT (ECIT) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached NOK 1,979 million, up 13.8% year-over-year, with 3.4% organic growth and 10% M&A-driven growth, despite one less working day.

• EBITDA for H1 2024 was NOK 256 million (margin 12.9%), up 8% in absolute terms but margin slightly down from 13.6% last year, impacted by macroeconomic headwinds.

• Adjusted profit for H1 2024 was NOK 86 million, down from NOK 95 million, mainly due to higher financial expenses and amortisations.

• Cost savings program is progressing as planned, with expected materialization in EBITDA.

• A voluntary offer of NOK 10 per share was launched in September 2024, expiring 1 October 2024.

Financial highlights

• Q2 2024 revenue was NOK 980 million, up 11.7% year-over-year; organic growth 3.1%, M&A growth 9.4%.

• EBITDA: NOK 256 million (12.9% margin); EBIT: NOK 132 million (6.7% margin).

• Adjusted diluted EPS for H1 2024 was NOK 0.11 (down from 0.12); free cash flow NOK 125 million (down from 165 million), mainly due to net working capital fluctuations.

• Net interest-bearing debt increased to NOK 827 million from NOK 481 million, driven by increased subsidiary ownership and acquisitions.

• Increased financial expenses due to higher debt and interest rates.

Outlook and guidance

• Cost-saving initiatives are expected to further improve EBITDA.

• Macroeconomic headwinds are likely to continue impacting IT division growth, especially in projects and hardware.

• Free cash flow is expected to recover as net working capital effects reverse in Q3.