Yahoo Finance

• Sales: SEK4,782 million, down 17.5% year-on-year.

• Gross Profit: SEK683 million, down SEK205 million or 24%.

• Gross Margin: 14.3%, down from 15.3% last year.

• Adjusted EBITA: SEK21 million, down from SEK192 million last year.

• EBITA Margin: 0.4%, down from 3.3% last year.

• EBIT: Negative SEK52 million, compared to SEK129 million last year.

• Cash Flow from Operating Activities: Negative SEK42 million, compared to SEK250 million last year.

• Leverage: 5.4%, up from 4.0% last year.

• SMB Segment Sales: SEK1.5 billion, down 1.2% year-on-year.

• SMB Segment Margin: 3.2%, compared to 3.6% last year.

• LCP Segment Sales: SEK3.2 billion, down 20.9% year-on-year.

• LCP Segment Margin: 0.3%, compared to 4.0% last year.

• Net Working Capital: SEK267 million, higher than last year's minus SEK261 million.

• CapEx: SEK73 million, with SEK45 million affecting cash flow.

• Warning! GuruFocus has detected 5 Warning Signs with FRA:9DG.

Release Date: January 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dustin Group AB (FRA:9DG) has successfully launched a new IT platform in the Benelux, which is expected to improve efficiency and customer experience.

• The company is seeing strong growth in its circularity offering, with approximately 1.2 million units of take back annually, enhancing its sustainability credentials.

• Despite challenges, the gross margin in the SMB segment remained stable, supported by continued price discipline.

• Dustin Group AB (FRA:9DG) has implemented organizational changes and efficiency measures expected to reduce costs by SEK150 million to SEK200 million annually.

• The company is preparing for future market recovery by aligning its operations with anticipated demand for AI PCs and post-pandemic replacement cycles.

Negative Points

• Sales for the quarter were SEK4,782 million, down 17.5% from the previous year, impacted by a weak market and IT platform implementation issues.

• Gross profit decreased by SEK205 million, or 24%, with a gross margin decline from 15.3% to 14.3%, primarily due to a negative product mix in LCP.

• Adjusted EBITA dropped significantly from SEK192 million to SEK21 million, with an EBITA margin falling from 3.3% to 0.4%.

• Cash flow from operating activities was negative SEK42 million, compared to SEK250 million last year, due to low business results and higher working capital.

• Leverage increased to 5.4% from last year's 4.0%, driven by lower business results and high net working capital.

Q & A Highlights

Q: How will Microsoft's changes in the incentive program affect Dustin Group's software and services sales? A: Johan Karlsson, CEO, stated that the changes will not drag on margins. The company has been preparing for these changes and does not expect any significant impact on their ability to make margins.