Karnell Group (KARNEL) Q3 2024 earnings summary

Executive summary

• Achieved record-high EBITA margin of 15.4% in Q3 2024, meeting medium-term targets.

• Net sales in Q3 2024 rose 37.1% year-over-year to SEK 356.6 million, with organic growth of 4.8%.

• Completed two major strategic acquisitions in Q3: NE Engineering (UK) and Haco/Haku (Sweden), expanding presence and portfolio.

• Strong cash flow from operating activities, up 49% LTM from Q3 2023, and maintained low leverage.

• Robust M&A pipeline and stable market outlook support continued expansion.

Financial highlights

• Q3 net sales: SEK 356.6 million (up 37.1% year-over-year); EBITA: SEK 54.9 million (up 45.4%), margin 15.4%.

• Organic sales growth was 4.8–5%; acquisitions contributed 34% to sales growth.

• Cash flow from operating activities in Q3: SEK 45.5 million (up 517%).

• Net profit after tax in Q3: SEK 29.1 million (down 6%).

• Transaction and acquisition costs impacted results, totaling SEK 8.4 million in Jan–Sep.

Outlook and guidance

• Market outlook remains stable with lower inflation and decreasing interest rates boosting investment confidence, especially in construction and industrial sectors.

• Q4 is historically strong, but Q3 margins were exceptionally high this year.

• Management expresses cautious optimism for the rest of the year, especially in Niche production.

• Tax rate expected to gradually decrease due to improved group structure.