Synsam Group (SYNSAM) Q3 2024 earnings summary

Executive summary

• Organic growth reached 9.5% in Q3 2024, up from 7.0% year-over-year, with strong market share gains, especially in Sweden and Finland.

• Net sales increased by 7.6% to SEK 1,559 million in Q3, with EBITDA up 2.1% to SEK 381 million, though margin declined to 24.1% due to campaign-driven growth and higher establishment costs.

• 32 new stores opened year-to-date, with the establishment rate ahead of schedule and 14–16 more expected by year-end, pulling forward future openings.

• Subscription business, including Synsam Lifestyle and contact lens subscriptions, showed double-digit growth in both revenue and customer base, with 817,000 total subscribers and stable churn.

• Profit after tax for Q3 was SEK 66 million, down from SEK 90 million, mainly due to higher financial expenses and tax rate.

Financial highlights

• Q3 gross margin was 73.9% (down from 74.9% year-over-year); EBITDA margin was 24.1% (down from 25.2%).

• Earnings per share for Q3 were SEK 0.44, down from SEK 0.61 year-over-year.

• Year-to-date net sales rose 8.5% to SEK 4,804 million, with EBITDA up 10.6% to SEK 1,208 million and margin at 24.9%.

• Cash flow from operating activities in Q3: SEK 238 million (up from SEK 104 million); investing activities: -95 MSEK, reflecting higher store establishment.

• Net sales cash (excluding subscriptions) reached SEK 2,994 million in LTM Q3 2024, with a 5% average annual growth rate.

Outlook and guidance

• Store opening target remains 90 for 2024–2026, with 46–48 expected by year-end 2024 and fewer in 2025–2026 due to accelerated 2024 activity.

• Management expects continued positive development, with all financial targets on track year-to-date and cost programs in place to offset inflation.

• The majority of the new cost program's impact is expected in 2025, targeting SEK 75 million in gross savings.

• Anticipates that interest rate cuts will boost consumer willingness to spend on higher-priced products.