Sonae (SON) Q4 2024 earnings summary

Executive summary

• Achieved record group sales of nearly €10 billion in 2024, up 18.4% year-over-year, with EBITDA surpassing €1.03 billion, driven by strong core business performance and over €1.1 billion invested in M&A, including majority stakes in Musti and the Druni-Arenal merger, reinforcing leadership in key sectors and geographies.

• Net income reached €223 million, up 18% year-over-year on a comparable basis, with a proposed dividend per share up 5% to 5.92 cents, maintaining a 6-6.5% yield and 52% payout ratio.

• Significant portfolio moves included acquisitions in health, beauty, and pet care, reinforcing market leadership in Iberia and the Nordics.

• Collaboration across group companies and digital innovation, including AI, enhanced customer experience and operational efficiency.

• Achieved a record-high ESG score of 69 from S&P, with 90% plastic packaging recyclability and 41% women in leadership roles.

Financial highlights

• Consolidated turnover grew 18.4% year-over-year to €9.95 billion; pro forma figures exceed this milestone.

• EBITDA reached €1.03 billion (+4.5% year-over-year); underlying EBITDA increased 25.8% to €908 million.

• Net income reached €223 million, up 18% year-over-year on a comparable basis; group share net result was €223 million, down from €357 million in FY23 due to a prior year capital gain.

• Free cash flow generation was €286 million; operational cash flow improved to €261 million; net debt increased by €160 million due to acquisitions, standing at €1.6 billion at year-end.

• Dividend per share to increase by 5%, maintaining a yield of 6-6.5% and a 52% payout ratio.

Outlook and guidance

• Expect continued growth momentum in 2025, focusing on maintaining or improving EBITDA margins despite cost inflation and competitive pressures.

• Store openings in food retail and health, wellness, and beauty expected to match 2024 levels; Musti to continue expansion in Sweden, Norway, and the Baltics.

• Commitment to cash flow generation, capital reallocation, and lowering leverage levels.

• Deleveraging expected to follow after M&A-related increase in net debt and LTV.