Delivering on the profitable growth strategy
Financial highlights second quarter
- The Group's net sales increased by 2.5% to SEK 623 m (608). Organic growth (constant currency) was 2.6%. Currency effect was 0.3%.
- The Group's adjusted EBITA amounted to SEK 132 m (109) with adjusted EBITA margin of 21.1% (18.0).
- Net result amounted to SEK 1 m (-26).
- Earnings per share before and after dilution amounted to SEK 0.01 (-0.24).
- Adjusted free cash flow amounted to SEK 14 m (-15).
Comment from CEO Pontus Bodelsson
Karnov Group delivers on its profitable growth strategy with strong innovation momentum and increased customer value. In Q2, we achieved an organic growth of 3% and the adjusted EBITA margin was 21%. We deliver on our cost-initiatives and have decreased the cost-base by EUR 7 m on annual run-rate basis. In the quarter we have expanded our mission-critical solutions through acquisitions in Denmark and France.
Delivering on the profitable growth strategy
The Group's net sales amounted to SEK 623 m in the quarter, a solid increase from the previous year. Our proprietary content is mission-critical for legal professionals in our local European markets, and we deliver on our profitable growth strategy combining organic growth with value-accretive acquisitions. In the second quarter, we acquired the carved-out Schultz legal information business in Denmark, which generated a broader customer base and stronger offering on the Danish municipality market. After the end of the quarter, we acquired the minor business Batir Technologies, which is a market-leading calculation tool for tax in the French real estate market. The acquisition of Batir Technologies is another step to deliver increased customer value and profitable growth in France.
The Group's adjusted EBITA margin reached 21% in the second quarter, an improvement compared to previous year. We focus on our cost-base and deliver on the synergies from our two initiatives.
The adjusted free cash flow was SEK 14 m in the second quarter and leverage was 3.0x adjusted EBITDA LTM following the completed acquisition of Schultz, in line with our financial target.
Content migration completed in Spain
We continue to progress ahead of plan with the Region South integration as well as harvesting synergies. We have now migrated 100% of the Aranzadi content onto the common content platform.
In parallel, we have good innovation momentum and are preparing the launch of the updated product suite as well as new AI solutions for increased customer value this autumn.
By the end of the second quarter, the annual run-rate synergies from the Region South integration amounted to EUR 4 m. We reiterate our ambition to generate synergies of EUR 7.5 m on annual run-rate basis by the end of 2024 and EUR 10 m on annual run-rate basis by the end of 2026.
Delivering on the Acceleration Initiative
Encouraged by the successful merger in Spain and the new opportunities from global technology shifts, we launched our Acceleration Initiative in February this year. This is a Group-wide initiative to generate further customer value as well as additional efficiencies of EUR 10 m on annual run-rate basis by the end of 2026.
By the end of the second quarter, the annual run-rate synergies from the Acceleration Initiative amounted to EUR 3 m, coming from primarily Region North and Group.
Building for the future
We deliver on our profitable growth strategy and are equally focused on innovating for increased customer value. We have a strong pipeline of AI innovations to be launched on all local markets during the autumn.
conference call on 21 august 2024
A webcasted telephone conference will be held at 09.00 a.m. CEST today, where CEO Pontus Bodelsson and CFO Magnus Hansson will present the report and answer questions.
You can follow the presentation via webcast and ask questions in written form on the following page:
https://ir.financialhearings.com/karnov-group-q2-report-2024
If you wish to participate via telephone, and thereby be able to ask questions verbally, please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.
https://conference.financialhearings.com/teleconference/?id=50048830
The presentation material and the report will be available before the conference starts at www.karnovgroup.com. An on-demand version will also be available after the presentation. The presentation will also be available on www.financialhearings.com.
For more information, please contact:
Pontus Bodelsson, President and CEO
Telephone: +46 709 957 002
Email: pontus.bodelsson@karnovgroup.com
Magnus Hansson, CFO
Telephone: +46 708 555 540
Email: magnus.hansson@karnovgroup.com
Erik Berggren, Head of Investor Relations
Telephone: +46 707 597 668
Email: erik.berggren@karnovgroup.com
This press release contains inside information that Karnov Group AB (publ) is required to make public pursuant to the EU Market Abuse Regulation (MAR) and information that Karnov Group AB (publ) is required to make public pursuant to the Swedish Securities Market Act. The information was submitted for publication by the contact person above on 21 August 2024 at 07:45 CEST.
Karnov Group clears the path to justice, providing mission critical knowledge and workflow solutions to European professionals in the areas of legal, tax and accounting, and environmental, health and safety. With content provided by over 7,000 well-renowned authors and experts, Karnov Group delivers knowledge and insights, enabling more than 400,000 users to make better decisions, faster - every day. With offices in Sweden, Denmark, Norway, France, Spain and Portugal, Karnov Group employs around 1,200 people. The Karnov share is listed on Nasdaq Stockholm, Mid Cap segment under the ticker "KAR". For more information, please visit www.karnovgroup.com.
