Yahoo Finance

• Sales: SEK4,988 million, 2% below last year.

• SMB Organic Growth: Negative 9.6%.

• LCP Growth: 4% from new public sector tenders.

• Gross Profit: SEK644 million, down SEK101 million or 16%.

• Gross Margin: 12.9%, down from 14.6% last year.

• Adjusted EBITA: SEK28 million, down from SEK142 million last year.

• EBITA Margin: 0.6%, down from 2.8% last year.

• EBIT: Negative SEK25 million, compared to SEK75 million last year.

• Cash Flow from Operating Activities: Negative SEK355 million, compared to SEK23 million last year.

• Leverage: 4.0, down from 5.0 last year.

• SMB Segment Sales: SEK1.3 billion, 12.4% below last year.

• LCP Segment Sales: SEK3.7 billion, up 2.2% year on year.

• Networking Capital: SEK170 million, higher than last year's SEK30 million.

• Cash Flow for the Period: Minus SEK470 million.

• CapEx: SEK84 million, with SEK51 million affecting cash flow.

• Dividend Proposal: No dividend for the financial year.

• Warning! GuruFocus has detected 6 Warning Signs with LTS:0R5W.

Release Date: October 16, 2024

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

Positive Points

• Dustin Group AB (LTS:0R5W) has launched a new IT platform in the Benelux, which is expected to enhance customer focus and increase efficiency.

• The company is seeing strong demand for its circularity offerings, with takeback volumes increasing by almost 50% year-over-year.

• Dustin Group AB (LTS:0R5W) is implementing a new organizational structure aimed at saving SEK150 million to SEK200 million annually by 2025-2026.

• The company has a high ambition within ESG, aiming for a 25% reduction in CO2 emissions per SEK1 million revenue over the next three years.

• Dustin Group AB (LTS:0R5W) is experiencing positive trends in contracted recurring services in the Nordics, contributing to an increase in the share of software and services sales.

Negative Points

• Sales in Q4 were SEK4,988 million, 2% below the previous year, with SMB organic growth at negative 9.6%.

• Gross profit decreased by SEK101 million or 16%, with gross margin dropping from 14.6% to 12.9%.

• Adjusted EBITA fell significantly to SEK28 million from last year's SEK142 million, with the EBITA margin decreasing from 2.8% to 0.6%.

• Cash flow from operating activities was negative SEK355 million, primarily due to a seasonal high working capital.

• The company announced that no dividend will be paid for the financial year due to the challenging market conditions.

Q & A Highlights

Q: Can you talk about the interest in AI-enabled PCs and their price points compared to previous products? Also, what do you see in terms of the replacement cycle driven by Windows 11? A: The market for AI PCs has developed recently, with new models priced about 10% higher than previous versions. These are typically purchased for specific roles within companies. Demand is still low overall, but we see some activity. Regarding Windows 11, larger corporates and public institutions are beginning to plan for upgrades, and we are working to inform smaller companies about the need to upgrade to avoid security issues.