Embellence Group (EMBELL) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 declined 7% year-over-year to MSEK 170, mainly due to weak retail demand in Europe and the US.

• Gross margin improved to 60.7% from 57.7% last year, driven by a stronger product mix and premium product sales.

• EBITA/EBITDA margin rose to 15.1% from 13.5%/14.4% last year, with EBITA/EBITDA stable at MSEK 26.

• Net profit increased to MSEK 16 from MSEK 13, and EPS rose to SEK 0.71 from SEK 0.59.

• CEO Olle Svensk announced his intention to step down by March 2025.

Financial highlights

• Net sales: MSEK 170 (Q3 2024), down from MSEK 183 (Q3 2023); year-to-date sales up 5% to MSEK 576.

• Gross margin: 60.7% (Q3 2024), up from 57.7% (Q3 2023).

• EBITA/EBITDA margin: 15.1% (Q3 2024), up from 13.5%/14.4% (Q3 2023); year-to-date margin at 14.6% vs. 12.5% prior year.

• Operating cash flow was MSEK 17 for the quarter, up from MSEK 13 last year; year-to-date operating cash flow MSEK 74.

• Net debt/EBITDA (R12) improved to 1.0 from 2.2; equity ratio at quarter-end was 60.4%.

Outlook and guidance

• No market recovery expected until 2025; retail environment remains cautious in key markets.

• Strategic focus on growing hospitality and direct-to-consumer channels, both showing positive momentum.

• Long-term target remains SEK 1 billion in sales and at least 15% EBITDA margin by 2028.

• Manufacturing expected to continue gaining market share.