In This Article:
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Net Sales: SEK 648 million in the third quarter, with 5% growth driven by increased online sales.
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Organic Growth: 2% overall, with region North driving growth.
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Adjusted EBITA Margin: 22% in the third quarter, an improvement of more than 3 percentage points.
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Leverage: 3.1 times EBITA for the last 12 months, slightly increased due to negative currency effects and seasonal cash flow.
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Synergies Harvested: EUR 9 million on an annual run rate basis by the end of the third quarter.
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Region North Sales: SEK 321 million, with 7.4% organic growth.
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Region South Sales: Decreased by SEK 13 million, mainly due to negative currency effects.
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Adjusted Free Cash Flow: Minus SEK 32 million in the third quarter, an improvement of SEK 33 million compared to the previous year.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Karnov Group AB (LTS:0A39) reported a strong margin improvement of more than 3% points in the third quarter, driven by synergies from their initiatives.
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The company successfully launched AI-supported legal information solutions across all markets, enhancing customer value and efficiency.
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Net sales grew to SEK 648 million in the quarter, with organic growth driven by the North region.
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The technical carveout in Spain was completed, removing technical risks and allowing focus on profitable growth with a new country manager.
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The company has harvested synergies on an annual run rate basis of EUR 9 million, with a target of EUR 20 million by the end of 2026.
Negative Points
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Leverage increased to 3.1 times EBITA due to negative currency effects and seasonal cash flow impacts.
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Region South experienced a decline in online sales by 3% compared to the previous year, mainly due to negative currency effects.
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The integration process in Spain has slightly affected sales work, although it is now moving into the next phase.
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Adjusted free cash flow was negative SEK 32 million in the third quarter, although it showed improvement compared to the previous year.
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There are concerns about maintaining performance in Region North as Alexandra Oquist takes on additional responsibilities in Region South.
Q & A Highlights
Q: Can you discuss the cash flow expectations for Q4 and Q1 of 2025, considering the seasonality? A: Pontus Bodelsson, CEO: We don't expect any changes to the seasonality. We anticipate a strong renewal season in region North in Q4 and Q1 in region South, similar to last year.
Q: Are there any risks to Region North now that Alexandra is moving to Region South, given her historical importance there? A: Pontus Bodelsson, CEO: Alexandra will continue overseeing Region North as CEO. We've provided her with additional support, and we have strong senior leadership in Sweden and Denmark to maintain success.