TCM Group A/S Shares Resilient Growth Amid Market Challenges
Overview of TCM Group A/S Recent Performance
In its interim report for the second quarter of 2025, TCM Group A/S has showcased resilience through improved earnings and steady sales growth, despite facing considerable challenges in the market. TCM Group, recognized as Scandinavia's third largest manufacturer of kitchens and bathroom furniture, reported crucial developments for the April to June period in a detailed announcement.
Sales Growth in Q2 2025
Sales during the second quarter adhered closely to expectations, with both B2B and B2C segments showing notable improvements. The company’s total sales climbed to DKK 349 million, marking a 5% increase compared to the same quarter in 2024. The organic growth of 3% reflects TCM Group's dedicated efforts and effective business strategies implemented during the first quarter of 2025.
CEO Insights on Sales Trends
CEO Torben Paulin provided valuable insights into the sales journey, emphasizing the declining order intake during Q2, especially in the latter months. This decline correlated with broader macroeconomic conditions, including a dip in consumer confidence and reduced retail expenditure. However, a positive trend was noted among house builders in the B2B segment.
Financial Highlights of Q2 2025
Significant metrics were highlighted in the report. The gross margin experienced a commendable rise, reaching 23.7% compared to 21.5% in the prior year. This increase stemmed from higher average selling prices paired with stable input costs throughout the quarter.
EBIT and EBITDA Performance
Adjusted EBIT grew by 20%, lifting from DKK 28 million in Q2 2024 to DKK 33.6 million. This growth is reflected in the adjusted EBIT margin, reported at 9.6%, up from 8.4% in the previous year.
Investment and Growth Initiatives
Free cash flow also saw improvement, totaling DKK 32 million compared to DKK 26 million in Q2 2024. This uptick in free cash flow was primarily driven by enhanced earnings and better net working capital management. TCM allocated DKK 18.3 million to capital expenditures, focusing chiefly on their ERP project and the newly completed lacquering facility, which is anticipated to reach full operational capacity shortly.
Expansion Plans with Celebert ApS
One of the most exciting strategic moves by TCM is the acquisition of the remaining 55% of Celebert ApS. Having initially acquired 45% in 2021, TCM hopes this complete ownership will facilitate ongoing growth, recalling the significant advancements made during their shared ownership period.
Revised Financial Guidance for 2025
TCM Group has updated its forecast for the fiscal year 2025, expecting total revenue between DKK 1,250 million and DKK 1,300 million. The previous forecast fell within a slightly broader range, implying more precise planning based on recent performance outcomes. Adjusted EBIT is projected between DKK 90 to 110 million.
Comprehensive Financial Summary
The second quarter and the first half of 2025 have been summarized with notable figures:
- Revenue for Q2 2025 stood at DKK 349.1 million, up from DKK 332.2 million.
- Adjusted EBITDA reached DKK 42.6 million, increasing from DKK 36.7 million.
- Net profit for Q2 settled at DKK 22.3 million, eclipsing last year's DKK 18.9 million.
- The cash conversion ratio reported was 78.6%.
About TCM Group A/S
TCM Group specializes in kitchen construction and storage solutions, with high-quality crafts rooted in Danish tradition. Their multi-brand strategy encompasses renowned names such as Svane Køkkenet, Tvis Køkken, Nettoline, and AUBO. The brands cover a diverse price spectrum, and TCM's products are accessible through approximately 220 dealers in Denmark and Scandinavia.
Frequently Asked Questions
What were the main highlights of TCM Group A/S's Q2 2025 report?
TCM Group experienced a 5% rise in sales, reaching DKK 349 million, with improved gross margins and adjusted EBIT demonstrating solid growth.
How did TCM Group perform in the B2B and B2C segments?
The company noted steady growth in both segments, despite a slowdown in order intake during the latter half of the quarter influenced by macroeconomic conditions.
What is the company's guidance for full-year 2025?
TCM Group has projected revenues between DKK 1,250 million and DKK 1,300 million and adjusted EBIT between DKK 90 million and DKK 110 million.
What capital investments did TCM Group make during Q2?
The company invested DKK 18.3 million in capital expenditures, mainly for its new lacquering facility and ERP system improvements.
What strategic acquisition did TCM Group announce?
TCM Group announced the acquisition of the remaining 55% of Celebert ApS, expanding their stake from 45% and fueling future growth expectations.
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