Electrolux Professional (EPRO) Q2 2024 earnings summary

Executive summary

• Net sales in Q2 2024 increased by 3.7% to SEK 3,268m, with acquisitions contributing 5.9% and organic sales down 0.7%. EBITA rose 6.4% to SEK 410m, with a margin of 12.5%.

• Profitability improved, mainly driven by strong Laundry performance, while Food & Beverage saw an organic sales decline. Order intake was slightly higher year-over-year, with continued strength in Laundry and Europe.

• The US market showed signs of recovery, especially in chains, though institutional demand remained weak. APAC-MEA sales decline was attributed to the Middle East and Africa.

• Acquisitions of Adventys and TOSEI contributed to sales growth and strategic positioning, with integration costs impacting margins in the short term.

• Rolling 12-month sales surpassed SEK 12 billion for the first time.

Financial highlights

• Q2 EBITA was SEK 410m (up 6.4%), with a margin of 12.5% (12.8% excluding SEK 8m in acquisition/integration costs).

• Net income was SEK 230m (down from SEK 257m); EPS was SEK 0.80 (down from SEK 0.89), mainly due to higher interest and taxes.

• Operating cash flow after investments was SEK 392m (down from SEK 462m), including dividend payouts and investments in new product lines.

• Gross operating margin improved to 35.2% (from 33.8%).

• Net debt/EBITDA ratio at 1.9x, stable sequentially despite acquisitions and dividend payments.

Outlook and guidance

• Management expects continued margin improvement, with Laundry as a key driver and integration synergies from acquisitions to start materializing in 2025, with some early effects in H2 2024.

• US market recovery is ongoing, especially in chains, though institutional demand remains subdued. Europe order intake is significantly higher year-over-year.

• Sustainability efforts led to a 56% reduction in CO2 emissions in H1 2024.