PUUILO PLC, HALF-YEAR FINANCIAL REPORT, 12 SEPTEMBER 2024. at 8.30 am
Strong growth in customer traffic resulted in resilient net sales and EBITA growth
Highlights Q2/2024
- Net sales increased by 14.9 (+17.0%) and were EUR 119.9 million (104.4)
- Like-for-like store net sales increased by 2.1% (+8.1%)
- Online store net sales increased by 10.6% (-4.3%)
- Gross profit was EUR 45.1 million (38.7) and gross margin was 37.6% (37.1%)
- Adjusted EBITA was EUR 24.8 million (20.9) increasing by 18.7%, which corresponds to an adjusted EBITA margin of 20.7% (20.0%)
- EBIT was EUR 24.4 million (20.6) which corresponds to 20.3% of net sales (19.7%)
- Operating free cash flow was EUR 31.7 million (32.0)
- Earnings per share were EUR 0.22 (0.18)
- Two new stores were opened during the second quarter (one new store)
Highlights H1/2024
- Net sales increased by 15.4% (+14.3%) and were EUR 195.4 million (169.3)
- Like-for-like store net sales increased by 3.1% (+6.8%)
- Online store net sales increased by 3.9% (-10.5%)
- Gross profit was EUR 72.7 million (62.4) and gross margin was 37.2% (36.9%)
- Adjusted EBITA was EUR 33.0 million (28.2) increasing by 17.3%, which corresponds to an adjusted EBITA margin of 16.9% (16.6%)
- EBIT was EUR 32.0 million (27.6) which corresponds to 16.4% of net sales (16.3%)
- Operating free cash flow was EUR 33.9 million (42.3)
- Earnings per share were EUR 0.28 (0.24)
- Four new stores were opened during the reporting period (two new stores)
Figures are in millions of euros unless otherwise stated and have been rounded. Hence the sum of individual figures may differ from the total shown. Puuilo's financial year starts on 1 February and ends on 31 January the following year. The figures in parentheses refer to the comparison period the previous year, unless otherwise stated. The information in this report is unaudited.
Key figures
| EUR million | Q2/2024 | Q2/2023 | H1/2024 | H1/2023 | 2023 |
| Net sales | 119.9 | 104.4 | 195.4 | 169.3 | 338.4 |
| Net sales development (%) | 14.9% | 17.0% | 15.4% | 14.3% | 14.2% |
| Like-for-like store net sales development (%) | 2.1% | 8.1% | 3.1% | 6.8% | 5,2% |
| Online store net sales development (%) | 10.6% | -4.3% | 3.9% | -10.5% | -11.2% |
| Gross profit | 45.1 | 38.7 | 72.7 | 62.4 | 123.9 |
| Gross margin (%) | 37.6% | 37.1% | 37.2% | 36.9% | 36.6% |
| Adjusted EBITA* | 24.8 | 20.9 | 33.0 | 28.2 | 54.1 |
| Adjusted EBITA* margin (%) | 20.7% | 20.0% | 16.9% | 16.6% | 16.0% |
| Adjusted EBITA* margin development (%) | 18.7% | 15.7% | 17.3% | 16.3% | 10.9% |
| EBITA* | 24.8 | 20.9 | 33.0 | 28.2 | 54.1 |
| EBITA* margin (%) | 20.7% | 20.0% | 16.9% | 16.6% | 16.0% |
| EBIT | 24.4 | 20.6 | 32.0 | 27.6 | 52.8 |
| EBIT margin (%) | 20.3% | 19.7% | 16.4% | 16.3% | 15.6% |
| Net income | 18.4 | 15.4 | 23.4 | 20.2 | 38.7 |
| EPS (EUR) | 0.22 | 0.18 | 0.28 | 0.24 | 0.46 |
| Operating free cash flow | 31.7 | 32.0 | 33.9 | 42.3 | 54.8 |
| Net debt / adjusted EBITDA | 1.3 | 1.2 | 1.3 | 1.2 | 1.5 |
| Net debt / adjusted EBITDA excl. impact of IFRS 16 | 0.3 | 0.4 | 0.3 | 0.4 | 0.5 |
| Number of stores (end of period) | 46 | 39 | 46 | 39 | 42 |
| Number of personnel converted into full-time employees (FTE) | 953 | 880 | 900 | 785 | 791 |
Puuilo's financial year starts on 1 February and ends on 31 January the following year.
* Operating profit before the amortisation and impairment of intangible rights
Outlook for the financial year 2024
Puuilo specifies the outlook for the financial year 2024 given in its financial statements release on 27 March 2024 and repeated in the Q1 business review on 11 June 2024.
The company forecasts that net sales will be EUR 380 - 400 million and the adjusted operating profit (adjusted EBITA) in euros will be EUR 60 - 66 million in the financial year 2024. Previously, the company forecasted that net sales would be EUR 380 - 410 million and the adjusted operating profit (adjusted EBITA) in euros would be EUR 60 - 70 million.
The specified guidance is based on the development in the first half of the year and the outlook for the second half of the financial year.
The forecast includes elements of uncertainty arising from change in purchasing power and customer behaviour driven by inflation, the recent VAT change and interest rate levels. In addition, strikes in Finland, geopolitical crises and tensions may have an impact on the availability and price level of goods.
Puuilo's long-term targets
The company's long-term financial targets for the strategy period 2024 - 2028:
- Growth: Net sales above EUR 600 million by the end of financial year 2028 (ends in January 2029)
- Profitability: Adjusted EBITA margin above 17% of net sales
- Profit distribution: The company aims to distribute at least 80% of net income for each financial year
- Leverage: Net debt to adjusted EBITDA below 2.0x
CEO Juha Saarela's review
In Q2, Puuilo's performance was good. Net sales growth was 14.9% (+17.0%) and a like-for-like growth was 2.1% (8.1%). We were especially pleased with the strong growth in the customer traffic, which was +18.2% in all stores and +4.7% in like-for-like stores. Comparison figures from the last year were challenging, but we beat them.
Customer traffic increased strongly, but weaker customer purchasing power is reflected slightly in the average basket size, which decreased by 2.8% compared to Q2 last year. This year, there are less more expensive products in the customer basket, but even more products from lower price categories. This mix shift has been slightly favourable for Puuilo's gross margins.
In Q2, Puuilo's adjusted EBITA was EUR 24.8 million (EUR 20.9 million), which reflects an increase of 18.7% compared to last year. Our adjusted EBITA margin expanded by 0.7 percentage points to 20.7% (20.0%). The EBITA increase was supported by solid development in net sales, good cost control, especially related to personnel costs, and gross margin improvement. Q2 gross margin was 37.6% (37.1%) expanding by 0.5 percentage points compared to last year. Good gross margin development was driven by favourable sales mix including higher share of private label products. We are satisfied with our cash flow generation as well. Operating cash flows in the prior year period were slightly flattered by excess inventory normalisation, while this year's figures reflect a higher volume of imported private label products and the accelerated expansion of the store network.
As the figures show, our growth continues. We opened two new stores during the reporting period: Forssa in May and Tampere Lahdesjärvi in June. Forssa was our final store conversion related to the Hurrikaani transaction. All three stores from our Hurrikaani transaction have now been re-opened as Puuilo stores and the results have been excellent; sales have exceeded our expectations. Q3 openings are also off to a good start: yesterday, we celebrated the opening of our Oulu Karjasilta store, and customers rushed in from the beginning of the day to enjoy the opening deals and, of course, the grilled sausages. The next locations in the Puuilo store opening road map will be Äänekoski and Kirkkonummi. Also, the calendar for 2025 begins to fill up nicely with the additional openings, which will again be in-line with the targets of our previously communicated growth strategy.
We believe that Puuilo will continue the steady performance for the rest of the financial year. As mentioned, customer confidence and customer purchasing power remain the biggest areas of uncertainty. We made some minor adjustments to the outlook for the financial year, mainly due to the changes in sales mix and average basket size. However, we expect that gross margin will improve compared to last year and we will maintain cost control. In any case, we expect our performance to continue to outperform the market in general. We are confident in Puuilo's future.
Finally, I want to thank our personnel, customers and shareholders!
Next financial reports
Puuilo's financial year starts on 1 February and ends on 31 January the following year. The company publishes Business reviews for the first and third quarter, a Half-year financial report and a financial statements release.
Business review Q3 February - October 2024 on 11 December 2024
All financial reports are published in English and in Finnish and are available at: https://www.investors.puuilo.fi/en/investors/reports_and_presentations.
Conference call in English and webcast in Finnish
The report will be presented for analysts, investors, and the media on the publication date in English at 10:00 am EET (9:00 am CET) and in Finnish at 11.30 am EET (10:30 am CET).
The conference call in English can be followed live at https://puuilo.videosync.fi/2024-q2-results. Asking questions requires participation in the conference call. You can access the teleconference by registering on the link http://palvelu.flik.fi/teleconference/?id=10012285. After the registration you will be provided phone numbers and a conference ID to access the conference. If you wish to ask questions, please, dial *5 on your telephone keypad to enter the queue.
The webcast in Finnish will begin at 11.30 am EET at https://puuilo.videosync.fi/q2-2024.
Recordings of both events will be available later the same day at Puuilo's Investors website at https://www.investors.puuilo.fi/en/investors/reports_and_presentations.
For further information, please contact:
Juha Saarela, CEO, mobile phone: +358 50 409 7641
Ville Ranta, CFO, mobile phone: +358 40 555 4995
