Lifco (LIFCO) Q2 2024 earnings summary

Executive summary

• Net sales rose 8.4% in Q2 2024 to SEK 6,725 million, with EBITA up 8.1% to SEK 1,608 million; six-month sales increased 4.6% to SEK 12,731 million, EBITA up 2.5% to SEK 2,886 million, mainly driven by acquisitions, while organic sales declined 3.9%.

• Operating cash flow surged 37.5% in Q2 and 12.9% for the six months, reflecting strong cash generation.

• Earnings per share rose 5.3% in Q2 to 1.98 SEK, but fell 2.8% to 3.50 SEK for the six months, mainly due to higher interest expenses.

• Five acquisitions announced or consolidated in H1 2024, contributing over SEK 1 billion in sales, with a focus on niche, high-margin companies.

• Lifco maintains a decentralized, profit-oriented culture, focusing on stable, long-term growth and sustainability.

Financial highlights

• Q2 EBITA margin was 23.9% (down 0.1 pts year-over-year); six-month margin at 22.7% (down 0.5 pts); rolling 12-month EBITA margin at 22.9%.

• Net profit for Q2 increased 5.0% to SEK 914 million; six-month net profit declined 2.9% to SEK 1,615 million.

• Return on capital employed at 21.6% for both Q2 and six months; ROCE excluding goodwill at 134%.

• Net debt/EBITDA at 1.9x as of June 30, 2024; interest-bearing net debt/EBITDA at 1.3x.

• Free cash flow per share continues to trend upward, with average growth of 24% since IPO.

Outlook and guidance

• Financial position remains strong, with net debt well below target maximum of 3x EBITDA, enabling further acquisitions.

• Acquisitions expected to have a positive impact on results and financial position in 2024.

• Management is prepared for continued challenging markets and is focused on operational flexibility.

• Consolidation of Eurosteel (Demolition & Tools) and Pro-Dental (Dental) expected in Q3 2024.

• Lifco targets annual EBITA growth, with organic EBITA growth expected to exceed GDP in relevant geographies.