Takeaways from the report
The Q2 report was characterised by slightly higher organic growth than we have seen in the past year, partly as the Easter holidays occurred in mid-April (Q2) rather than in Q1 last year. Due to this effect, we anticipated H1 sales to be tilted more towards Q2, but even so SEK 1,983m in sales was 4% above our estimate. The gross margin was solid at roughly 32%, negatively impacted by FX and the product mix of Easter sales. The adj. EBITA was strong (13% above cons, 7% above ABGSCe) for a margin of 7.3%. Free cash flow was significantly better than Q2'24 (SEK -300m), but still negative at SEK -91m. Q2 is a tough quarter for FCF, characterised by seasonal inventory build-up. Moreover, FCF was affected by new FX regulations in the UK, decreasing OCF by SEK 12m.
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