Growth, improving profitability and progress on transformation
October - December 2024
- Net revenue increased by 18%, totalling SEK 451 (382) million. In local currencies there was growth of 19%.
- Adjusted operating profit (EBIT) was SEK 1 (-7) million, and the adjusted operating margin was 0.3% (-1.9%). Operating profit (EBIT) amounted to SEK -5 (-45) million, corresponding to an operating margin of -1.1% (-11.7%).
- Cash flow for the period was SEK 32 (61) million and the cash position at the end of the period was SEK 297 (222) million.
- Earnings per share before and after dilution was SEK -0.01 (-0.62).
January - December 2024
- Net revenue increased by 6%, totalling SEK 1,628 (1,537) million. In local currencies growth was also 6%.
- Adjusted operating profit (EBIT) totalled SEK 25 (-69) million, and the adjusted operating margin was 1.5% (-4.5%). Operating profit (EBIT) was SEK 18 (-111) million, corresponding to an operating margin of 1.1% (-7.2%).
- Cash flow for the period was SEK 68 (91) million.
- Earnings per share before and after dilution was SEK 0.45 (-1.21).
| Oct-Dec | Jan-Dec | ||||
| SEKm (unless stated otherwise) | 2024 | 2023 | 2024 | 2023 | |
| Net revenue | 451 | 382 | 1,628 | 1,537 | |
| Growth (%) | 18% | -10% | 6% | -8% | |
| Growth in local currencies (%) | 19% | -15% | 6% | -13% | |
| Gross profit | 195 | 171 | 724 | 607 | |
| Profit after variable costs | 93 | 80 | 361 | 256 | |
| Overhead costs | -76 | -72 | -270 | -267 | |
| EBITDA | 10 | -13 | 84 | -36 | |
| Operating profit (EBIT) | -5 | -45 | 18 | -111 | |
| Adjusted EBITDA | 16 | 8 | 91 | -11 | |
| Adjusted operating profit (EBIT) | 1 | -7 | 25 | -69 | |
| Items affecting comparability | -6 | -38 | -7 | -42 | |
| Profit/loss for the period | -1 | -49 | 36 | -96 | |
| Gross margin (%) | 43.2% | 44.7% | 44.5% | 39.5% | |
| Profit after variable costs (%) | 20.6% | 20.9% | 22.2% | 16.7% | |
| Adjusted EBITDA (%) | 3.6% | 2.1% | 5.6% | -0.7% | |
| Adjusted operating margin (EBIT) (%) | 0.3% | -1.9% | 1.5% | -4.5% | |
| Cash flow for the period | 32 | 61 | 68 | 91 | |
| Net debt (+) / Net cash (-) | -297 | -222 | -297 | -222 | |
| Earnings per share before dilution (SEK) | -0.01 | -0.62 | 0.45 | -1.21 | |
| Earnings per share after dilution (SEK) | -0.01 | -0.62 | 0.45 | -1.21 | |
Significant events during the reporting period
On 5 December 2024, Kenneth Christensen announced his resignation from the board of directors following Procuritas' (Procuritas Capital Investors V GP, Limited, acting as a partner to Procuritas Capital Investors V, LP, and PCI V Co-Investment AB (together "Procuritas")) divestment of its shares in Pierce Group.
On 12 December 2024 Shu Sheng (Procuritas Capital Partners V LP) left the Nomination Committee, and Fabian Bengtsson (Siba Invest AB) was appointed as a member.
Significant events after the end of the reporting period
No significant events took place after the end of the reporting period.
CEO comments
It is with great pleasure that I present a quarterly report that once again shows a positive adjusted EBIT. 2024 was the year where we took the first transformative steps in adjusting our strategy and business model to enable future growth and profitability. A transformation of our magnitude comes with numerous turn-around initiatives such as a new leaner organization and operating model, a massive upgrade of our tech stack and strong push to improve the health of our inventory. Such initiatives and associated costs are non-recurring in nature, making like for like comparisons to past performance more complex. I am very satisfied that we are now back in underlying black figures for the fourth quarter and for the year.
Sales in the fourth quarter showed strong growth, albeit at a lower margin, as we chose a more ambitious purchasing and sales strategy vs last year to reverse the trend of a declining customer base. The market remains highly price-sensitive, and our focus is to increase profit in absolute terms while strengthening our position. Net revenue increased with 18 percent, from SEK 382 million to SEK 451 million and the gross profit increased with 14 percent from SEK 171 million (44.7 percent) to SEK 195 million (43.2 percent). Adjusted EBIT was SEK 1 million, an improvement vs last year's SEK -7 million. Net cash at the end of the year was SEK 297 million. We had a reversal of the obsolescence provision of SEK 5 million in the fourth quarter but also an estimated SEK 6 million in transformation costs mainly in relation to our tech stack upgrade, primarily costs for external consultants and costs associated to systems not yet in use. On top of this we had SEK 2 million in amortization of discontinued brands, why the adjusted EBIT reflects the underlying business fairly well for the quarter. For the full year of 2024 we showed SEK 25 million in adjusted EBIT. The obsolescence reversal was SEK 19 million, the transformation costs SEK 10 million and the amortization of discontinued brands SEK 7 million, why the adjusted EBIT reflects the underlying business fairly well also for the full year of 2024.
This is temporarily satisfactory as a steppingstone for our future development - we are on the right track, but we have a lot left to do. It is promising that our customer base, which has been in decline since 2022, has started to grow again. But we have a long road left to go and customer acquisition and retention remain our top priority. To become the undisputed leader in our industry, we are focusing on excelling in the basics: offering the best product range at competitive prices with short delivery times. We have increased our number of stocked articles with 50 percent during the year, to ensure we have the right products available and ready to ship to our customers. However, we still face challenges with product availability in certain strategic categories. To address this, we have implemented new purchasing processes, which will further enhance our availability. In preparation for the 2025 season our commercial teams have invested in upgrading our own brand assortment to ensure we have a revamped assortment for our value-for-money own brands in time for the season start.
The massive upgrade of our tech stack, in which we change our e-com platform, our warehouse management system, our customer data platform, and make a major upgrade to our PIM-system, is aimed at putting in place a modern and scalable structure to support future growth and customer retention. This work is progressing well and will continue throughout 2025.
Longer term, acquisitions to consolidate our position in a fragmented market remains an important potential driver to create value. As the global economic outlook remains highly uncertain, we maintain our full focus on our business, on what we can control, and we remain determined to realize our vision and achieve our strategic goals.
For further information, please contact:
Göran Dahlin, CEO
Email: Goran.Dahlin @piercegroup.com
Tel: +46 72 730 31 11
Fredrik Ideström, CFO
Email: Fredrik.Idestrom@piercegroup.com
Tel: + 46 76 546 49 80
About Pierce Group
Pierce is a leading and fast-growing e-commerce company selling gear, parts and accessories to riders across all of Europe via some forty websites adapted to local markets. Pierce has two major segments, Offroad - sales to motocross and enduro riders, and Onroad - sales to street riders. Pierce also has a smaller segment, Other, which primarily focuses on snowmobile riders. With a large and unique product assortment, including several private brands, an excellent customer experience and attractive prices, Pierce is changing the motorcycle enthusiast market in Europe. Headquarters are located in Stockholm, the central warehouse is in Szczecin, and the majority of our customer support services is located in Barcelona.
The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on 21 February 2025.
For further information, please contact:
Fredrik Ideström, CFO
Email: fredrik.idestrom@piercegroup.com
Tel +46 76-546 49 80
Göran Dahlin, CEO
Email: Goran.Dahlin@piercegroup.com
Tel: +46 727 303 111
This information is information that Pierce Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person[s] set out above, at 2025-02-21 08:00 CET.
