TCM Group A/S Posts Strong Q2 2024 Performance
TCM Group A/S: Interim Report Q2 2024
Interim report Q2 2024 (April 1 - June 30)
(All figures in brackets refer to the corresponding period in 2023 – AUBO Production A/S is included in the figures as from July 3, 2023)
Organic growth in sales and improved earnings, despite challenging market conditions.
CEO Torben Paulin:
“Sales in the second quarter have developed positively despite the anticipated weak B2B kitchen market. Organically, sales grew by 5% year-on-year, supported by a growth in B2C sales of over 25% year-on-year. As expected, B2B sales declined in the quarter due to the slowdown in the Project sales market. Overall revenue in Q2 was DKK 332 million compared to DKK 256 million in Q2 last year. Sales in Denmark, which accounts for 80% of the Group revenue, increased by 15%, with an underlying organic growth of 6%.
Overall gross margin increased to 21.5% in Q2 compared to 20.2% in the same quarter last year. The growth in margin was attributed to the inclusion of AUBO sales (AUBO Production was acquired in Q3 of 2023) and an increase in the share of higher margin B2C sales in turnover.
Adjusted EBIT in Q2 was DKK 28 million compared to DKK 22 million in Q2 last year, and the adjusted EBIT margin was 8.4% compared to 8.7% in Q2 last year. If the amortisation of intangible assets recognized as part of the AUBO acquisition is considered, the underlying adjusted EBIT margin improved from 8.7% in Q2 last year to 8.9% in Q2 this year.
Free cash flow was DKK 26 million, up from DKK -2 million last year, due to higher earnings and a significant improvement in working capital. Leverage decreased to 3.20 (down from 3.73 in the previous quarter), well within agreed covenants.
During the second quarter, TCM Group continued to expand its presence in Denmark by adding two new AUBO branded stores.
As part of TCM Group's commitment to transparency regarding the environmental impact of its products, third-party approved and validated Environmental Product Declarations (EPD) for the AUBO brand were released in the quarter, ensuring all brands are now covered by EPDs.
The financial outlook for 2024 has been adjusted, now projecting full-year revenue in the range of DKK 1,125-1,200 million (up from DKK 1,000-1,150 million) with earnings (adjusted EBIT) in the range of DKK 70-90 million (previously DKK 55-85 million). This outlook includes an expected positive influence from the adjustment of the contingent consideration related to the AUBO Production A/S acquisition of DKK 3-5 million.
Financial Highlights Q2 2024
- Revenue DKK 332.2 million (DKK 255.5 million), an increase of 30.0%.
- Adjusted EBITDA DKK 36.7 million (DKK 27.5 million), margin was 11.1% (10.8%).
- Adjusted EBIT of DKK 28.0 million (DKK 22.3 million), margin was 8.4% (8.7%).
- Non-recurring items had a total impact of DKK 0.0 million (DKK 2.8 million).
- EBIT of DKK 28.0 million (DKK 19.5 million), corresponding to a margin of 8.4% (7.6%).
- Net profit of DKK 18.9 million (DKK 12.2 million).
- Free cash flow was DKK 25.8 million (DKK -1.6 million).
- Cash conversion ratio was 94.8% (48.8%).
Financial Highlights H1 2024
- Revenue DKK 624.7 million (DKK 519.4 million), an increase of 20.3%.
- Adjusted EBITDA of DKK 61.1 million (DKK 45.5 million), margin was 9.8% (8.8%).
- Adjusted EBIT of DKK 43.8 million (DKK 35.4 million), margin was 7.0% (6.8%).
- Non-recurring items had a negative impact of DKK 0.0 million (DKK 4.7 million).
- EBIT of DKK 43.8 million (DKK 30.9 million), corresponding to a margin of 7.0% (5.9%).
- Net profit of DKK 25.9 million (DKK 17.6 million).
- Free cash flow was DKK 38.4 million (DKK -37.4 million).
- Full-year guidance remains at revenue in the range of DKK 1,125-1,200 million with earnings (adjusted EBIT) in the range of DKK 70-90 million.
For further information please contact:
Torben Paulin, CEO, TCM Group A/S, +45 21 21 04 64
Thomas Hjannung, CFO, TCM Group A/S, +45 25 17 42 33
IR Contact – ir@tcmgroup.dk
About TCM Group
TCM Group is Scandinavia’s third-largest manufacturer of kitchens and furniture for bathrooms and storage. The products are designed and produced in Denmark, rooted in a proud tradition of quality and craftsmanship. TCM Group adopts a multi-brand strategy, with the main brand being Svane Køkkenet, alongside Tvis Køkken, Nettoline, and AUBO. Combined, these brands cater to the entire pricing spectrum and are distributed through approximately 220 dealers across Denmark and Scandinavia. TCM Group also sells private label kitchens through DIY stores in Denmark and independent kitchen stores in Norway, and supplies the 45% owned e-commerce kitchen business Celebert, operating under multiple brands.
Frequently Asked Questions
What does TCM Group A/S report for Q2 2024?
TCM Group A/S reported a substantial growth in sales and earnings, despite market challenges, with a revenue of DKK 332 million.
How did the company's gross margin change in Q2 2024?
The overall gross margin increased to 21.5% in Q2 2024 compared to 20.2% in the same period last year.
What is the financial outlook for TCM Group for 2024?
The financial outlook for 2024 is a revenue range of DKK 1,125-1,200 million and earnings (adjusted EBIT) of DKK 70-90 million.
Which brands does TCM Group operate under?
TCM Group operates under several brands, including Svane Køkkenet, Tvis Køkken, Nettoline, and AUBO.
How did the free cash flow perform in Q2 2024?
Free cash flow was DKK 26 million in Q2 2024, a significant increase compared to DKK -2 million last year.
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