PUUILO PLC, BUSINESS REVIEW, 11 DECEMBER 2024. at 8.30 am
Net sales and adjusted EBITA increased significantly, relative profitability at excellent level
Highlights Q3/2024
- Net sales increased by 10.8% (+15.4%) and were EUR 102.2 million (92.3)
- Like-for-like store net sales decreased by 0.4% (+5.3%)
- Online store net sales decreased by 0.8% (-10.3%)
- Gross profit was EUR 38.9 million (33.2) and gross margin was 38.0% (36.0%)
- Adjusted EBITA was EUR 19.7 million (15.3) increasing by 28.9%, which corresponds to an adjusted EBITA margin of 19.2% (16.5%)
- EBIT was EUR 19.3 million (15.0) which corresponds to 18.8% of net sales (16.2%)
- Operating free cash flow was EUR 10.0 million (14.0)
- Earnings per share were EUR 0.17 (0.13)
- One new store was opened during the third quarter (one new store)
Highlights February - October 2024
- Net sales increased by 13.8% (+14.7%) and were EUR 297.6 million (261.6)
- Like-for-like store net sales increased by 1.9% (+6.3%)
- Online store net sales increased by 2.3% (-10.4%)
- Gross profit was EUR 111.6 million (95.7) and gross margin was 37.5% (36.6%)
- Adjusted EBITA was EUR 52.7 million (43.4) increasing by 21.4%, which corresponds to an adjusted EBITA margin of 17.7% (16.6%)
- EBIT was EUR 51.3 million (42.6) which corresponds to 17.2% of net sales (16.3%)
- Operating free cash flow was EUR 44.0 million (56.3)
- Earnings per share were EUR 0.45 (0.37)
- Five new stores were opened during the reporting period (three 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 | Q3/2024 | Q3/2023 | 1 Feb 2024 - 31 Oct 2024 | 1 Feb 2023 - 31 Oct 2023 | 2023 |
| Net sales | 102.2 | 92.3 | 297.6 | 261.6 | 338.4 |
| Net sales development (%) | 10.8% | 15.4% | 13.8% | 14.7% | 14.2% |
| Like-for-like store net sales development (%) | -0.4% | 5.3% | 1.9% | 6.3% | 5.2% |
| Online store net sales development (%) | -0.8% | -10.3% | 2.3% | -10.4% | -11.2% |
| Gross profit | 38.9 | 33.2 | 111.6 | 95.7 | 123.9 |
| Gross margin (%) | 38.0% | 36.0% | 37.5% | 36.6% | 36.6% |
| Adjusted EBITA* | 19.7 | 15.3 | 52.7 | 43.4 | 54.1 |
| Adjusted EBITA* margin (%) | 19.2% | 16.5% | 17.7% | 16.6% | 16.0% |
| Adjusted EBITA* margin development (%) | 28.9% | 2.6% | 21.4% | 11.1% | 10.9% |
| EBITA* | 19.7 | 15.3 | 52.7 | 43.4 | 54.1 |
| EBITA* margin (%) | 19.2% | 16.5% | 17.7% | 16.6% | 16.0% |
| EBIT | 19.3 | 15.0 | 51.3 | 42.6 | 52.8 |
| EBIT margin (%) | 18.8% | 16.2% | 17.2% | 16.3% | 15.6% |
| Net income | 14.5 | 11.2 | 37.9 | 31.4 | 38.7 |
| EPS (EUR) | 0.17 | 0.13 | 0.45 | 0.37 | 0.46 |
| Operating free cash flow | 10.0 | 14.0 | 44.0 | 56.3 | 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 | 0.4 | 0.4 | 0.4 | 0.4 | 0.5 |
| Number of stores (end of period) | 47 | 40 | 47 | 40 | 42 |
| Number of personnel converted into full-time employees (FTE) | 828 | 818 | 876 | 796 | 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 repeats the outlook for the financial year 2024 given in its half-year report on 12 September 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.
The outlook is based on the development in the first three quarters and the outlook for the rest of the financial year.
The forecast includes elements of uncertainty arising from change in purchasing power and customer behaviour driven by inflation 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
Puuilo's autumn season showed mixed results from a revenue perspective. In August - October (Q3), our net sales increased by 10.8%, but like-for-like store net sales decreased by 0.4%. However, customer traffic growth continued, at +2.5% in like-for-like stores and +14.7% in all stores. In the third quarter, like-for-like sales increase levelled off, which was due to strong comparison figures and the decline in average basket size. This year, the onset of winter climate was delayed compared to the previous year, which had some impact on sales development. Customer caution remained evident, particularly in the average basket size, which dropped by over 3% compared to Q3 of the previous year. The average basket size continues to shift towards lower-priced items.
On the profit side, Puuilo's results were exceptional. In Q3, we reported an adjusted EBITA of 19.7 million euros, which corresponds to 28.9% growth compared to a prior year and an adjusted EBITA margin of 19.2%. The company's performance was excellent, with strong profitability driven by a gross margin increase to 38.0% and good cost control. The strengthening of the gross margin was driven by the sales mix and a significantly higher share of private-label products. In Q3 previous year, the gross margin included a one-time inventory adjustment that had a negative impact on the gross margin of approximately 0.6 percentage points.
In Q3, we opened a new store in Oulu Karjasilta. The opening went well, and we now serve customers in Oulu with three stores in total. In November (Q4), we opened a store in Äänekoski, and later this financial year, we will launch the much-anticipated Kirkkonummi store. This brings the total number of new store openings this financial year to seven, which slightly exceeds our strategic targets.
Next year already looks very promising regarding new store openings. We've announced five new openings through press releases, but it seems we'll need to issue a couple more announcements soon. Strong expansion of our store network is once again on the way.
Regarding the general economic situation, we believe there will be slightly better times ahead. However, we expect that the recovery of purchasing power and demand will only occur in the latter half of next year. In this context, we are very happy that customers trust us and our customer traffic continues to grow.
With this strong performance update, I would like to wish all our shareholders, customers, and the entire personnel Happy Holidays!
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.
Financial Statements Release 2024 on 27 March 2025
Business review Q1 February - April 2025 on 10 June 2025
Half-year Financial Report February - July 2025 on 11 September 2025
Business review Q3 February - October 2024 on 10 December 2025
The Financial statements 2024 and the Report by the Board of Directors will be published during week 17.
Puuilo's Annual General Meeting is planned for Thursday 15 May 2025. The meeting will be convened by the company's Board of Directors separately at a later date.
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-q3-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=10012286. 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/q3-2024.
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
