Earnings call transcript: Electric Returns sees growth in Q2 2025

Electric Returns (ELRET) reported its second-quarter 2025 earnings, showcasing a revenue increase to NOK 367 million, marking a 5.2% year-over-year growth. The company’s focus on electric vehicle chargers and the integration of the SpotOn system contributed to its performance. According to InvestingPro data, the company maintains strong financial health with a current ratio of 1.47, indicating solid liquidity. Despite a net profit of zero, improvements were noted in EBITDA and like-for-like sales growth. The stock price saw a slight decline of 0.32%, closing at NOK 15.85, reflecting mixed investor sentiment.

Key Takeaways

• Revenue grew by 5.2% year-over-year, reaching NOK 367 million.
• The gross margin improved to 34.9% from 32.4% the previous year.
• EV chargers emerged as the fastest-growing product category.
• The stock price experienced a minor decline of 0.32% post-earnings announcement.

Company Performance

Electric Returns demonstrated robust performance in Q2 2025, with a focus on expanding its product offerings and geographic presence. InvestingPro analysis reveals impressive year-over-year revenue growth of 6.46% and a remarkable 68.98% total return over the past year. The company opened its 31st store in Bergen, Norway, and observed a consistent increase in store visitors and average basket sizes. The Swedish market showed significant growth, particularly in B2B sales, contributing to four consecutive quarters of positive EBITDA. InvestingPro subscribers can access detailed financial health metrics and 12+ additional ProTips for deeper insight into the company’s performance.

Financial Highlights

• Revenue: NOK 367 million, up 5.2% year-over-year
• Like-for-like sales growth: 1.3%
• Gross margin: 34.9%, compared to 32.4% last year
• EBITDA: NOK 40 million, an increase of NOK 10 million
• Net profit: NOK 0, an improvement of NOK 5 million

Outlook & Guidance

Looking forward, Electric Returns plans to explore 1-2 new store locations in Sweden and anticipates continued growth in the electrification market. July sales have already shown a promising growth rate of 5.8%. The company is also considering 1-3 new store openings in the next 6-12 months. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, suggesting potential upside opportunity. Investors can access comprehensive valuation metrics and growth forecasts through InvestingPro’s detailed research reports, available for over 1,400 stocks including Electric Returns.

Executive Commentary

CEO Andreas Niss emphasized the company’s commitment to being a comprehensive provider of electrical installation materials. He stated, "We continue to focus on being a total provider of electrical installation material." Niss also highlighted the satisfactory performance of the Swedish operations as a base for further growth.

Risks and Challenges

• Potential supply chain disruptions could impact product availability.
• Market saturation in key regions may slow growth.
• Macroeconomic factors, such as fluctuating interest rates, could affect consumer spending.
• Increased competition in the electrification market may pressure margins.

Q&A

During the earnings call, analysts inquired about the growth drivers in Sweden, to which the company attributed the success to B2B customers, particularly local electrician companies. Questions also focused on the cost of shipping and freight, which accounted for 4% of the company’s cost of goods sold.

Full transcript - Elektroimportoren As (ELIMP) Q2 2025:

Trond, Moderator/Host, Electric Returns: Good morning, and welcome to Electric Returns’ Second Quarter Presentation. We will begin with a presentation from CEO, Andreas Niss and CFO, Jurgen Wist, followed by a Q and A session. If you have any questions during the presentation, please feel free to submit them through the Q and A function and we will address them at the end. With that, I’ll hand it over to Andreas.

Andreas Niss, CEO, Electric Returns: Thank you very much, Trond, and good morning, everyone. Thank you for dialing in. As Trond was saying, I will start with a short summary of the second quarter and give you an update on key strategic areas and operational activities for the quarter. Jorgen will then take you through the details of of the financials before we give our outlook for the coming months and finish off with a q and a session. So for the operational summary, the fact that Easter was in March and in April gave us difficulties in creating growth in April.

Total sales for the month declined with 5% versus last year. However, we managed a double digit growth in May, and we also grew the business in June, but with somewhat smaller numbers. Both b to b and b to c segments are growing in q two, and stores represents the growth with online sales on par with last year. We continue to grow to increase our gross margin percentage through improvements in category and campaign management, and growth in the physical stores comes from an increase in number of visitors and a slightly higher average basket. In late June, we signed an agreement for store number 31 in Norway, this time in Bergen.

So this will be our third store in the larger Bergen area. Sweden continues to deliver strong like for like growth both in revenue and margin, and we now have four consecutive quarters with positive EBITDA for our Swedish business. The total revenue for the quarter was 367,000,000, up 18,000,000 from last year, an increase of 5.2. Like for like sales grew with 1.3%. And in Sweden, like for like sales grew with 22.8.

Gross margin is up 2.5 percentage points from 32.4 last year to 34.9% this year. Operating expenses ended at 87,000,000, up 7,000,000 from last year, driven mainly by three more stores compared to last year. OpEx to sales ratio is up 1% to 23.8 from 22.8 last year. We delivered an EBITDA of NOK40 million, up NOK10 million from NOK30 million last year. The net profit for the quarter is zero, which is an increase of 5,000,000 from last year.

Looking at the customer flow in our stores in Norway, visitors to our stores are up 4%, impacted negatively in April because of the Easter effect. But for the full quarter, visits are up. The average basket increased with 3%, positively affected by a very large increase in sales of EV chargers. Conversion rate had a small decrease of point 3% ending at 54.9 for the quarter. And we’re happy to see that we experienced growth in both b to c and b to b, with b to c increasing with 3.4% and b to b increasing with 5% for the full quarter.

The wholesale market have shown little or no signs of recovery so far this year, with a total market growth of 1% for the first six months of twenty twenty five. In this market, we have managed to grow with more than 10%, and that gives us continued confidence in the attractiveness of our concept moving forward. For Sweden, we’re very happy to see that the positive trend continues with strong growth in both revenue and profit in the second quarter. Revenue increased with 22.8% compared to Q2 in ’24. Gross margin increased with 27.9%, up from 18.5% last year, giving us a gross no, sorry.

Gross margin increased to 27.9%, up from 18.5% last year, which is a growth of 86%. Positive EBITDA of 2,000,000, up 8,000,000 from minus six last year and the fourth consecutive quarter with positive EBITDA for LBTQ. Further on our development in Sweden, we see that sales have now grown at a healthy base for over the last twelve months, when with gross margins improving even further. We have implemented cost reductions, and operational cost is now at a satisfactory level and will be still monitored closely going forward. We have a warehouse lease capacity, which is too large, and that is still under review to see if we can lower the rental costs.

In our Vedesta store, like for like growth year to date is more than 30%. The store location is and size remains suboptimal, but the efficiency measures that we have delivered may gives us a positive contribution from the store first half twenty twenty five. So we are now looking at our Swedish setup, and I have assessed that it’s an acceptable base for further growth. So we will do a selective search for new store locations, one or two to begin with, in in the next twenty four months. Look at our key strategic areas.

We continue to focus on being a total provider of electrical installation material delivered through an omnichannel solution by specialist employees, supporting our profitability with the constant product development of our own brands and making sure we are ready to gain from the coming market opportunities that lies in the electrification of our society. Last but not least, we continue to look for new store openings and now, happily, also in Sweden. Looking at this for the second quarter, we have signed one more store in Norway and are in negotiations for one to three more stores with possible openings in the next six to twelve months. The process to integrate SpotOn is now completed, and it will reduce cost with approximately 2,000,000 in this second half of this year. Our specialist position continues to be proven by growth in both customer segments and our market share increase in b to b, and also the fact that 72% of our customers rate us as having employees that are very highly skilled.

The NAMRON share of business increased slightly in Norway to 31.8%, and in Sweden, share of business increased with 2.5% to 9.9% for the quarter. We see growth in all major categories, and EV chargers continues to be the fastest growing category also in the second quarter. Sales in Sweden increased with 22.8%, and number of visitors are up by 27.8% in our stores. As mentioned, we are now starting to explore the opportunities for store number two and three in Sweden. And in Norway, we see that new stores have a contribution of SEK 2,000,000 in the second quarter.

And with that, I hand over to Jurgen, who will take you through some more details of the financials.

Jurgen Wist, CFO, Electric Returns: Thank you, Andreas. Total revenue in the second quarter was $367,000,000 corresponding to an increase of 5.2% compared to last year. The increase was driven by store revenue in Norway and both store and online revenue in Sweden. The like for like revenue growth was 1.3% in the quarter. As the Easter was in April compared to March, we had a negative Easter effect of approximately SEK 15,000,000 in the quarter compared to last year.

Adjusted for the Easter effect, the like for like growth was approximately 6%. Like for like growth year to date is 5.1%. The strong performance in the B2B segment has continued in a tough market during second quarter, both in Norway and Sweden. B2B revenue increased by 6.3%, while B2C revenue increased by 3.9%. Online revenue in Norway decreased by 11.7% in the quarter compared to last year.

The decrease is mainly explained by Easter effects. Year to date, there is a slight increase of 0.3%. Another explanation is that a major part of the B2B revenue online is recognized as store revenue because the products are delivered from the stores. The store in LBTIC contributed with $11,000,000 in revenue for the quarter, corresponding to an increase of 17.4%. Online revenue in LBTIC was $30,000,000 an increase of 39.7% compared to last year.

B2B revenue in Sweden for the quarter was $9,000,000 The decrease in other revenue is mainly a onetime project in Spoton with our revenue above 5,000,000 Gross profit for the quarter was $128,000,000 up from $113,000,000 last year. This translated into a gross margin of 34.9% compared with 32.4% in the same period last year. Overall margin were impacted by improved category and campaign management, such as improved purchase prices and price adjustments. In Norway, the gross margin was 35.8% compared to 33.9% last year. The margin in Sweden was 27.9% compared to 18.5% last year.

Margin on both B2C and B2B continues to increase in Sweden. Operating expenses in sales channels have increased with $6,000,000 compared to last year. This is mainly a result of three new stores in Norway. Other operating expenses increased with $2,000,000 due to general salary increase and KPI adjustments. OpEx to sales ratio at 23.8% compared to 22.8% last year.

Adjusted for Easter effect, the OpEx to sales ratio is in line with last year. As I communicated in the Q1 presentation, the group continues to maintain a rigid cost control, but the comparables will be tougher going forward due to the cost savings during the last year. Reported EBITDA for the quarter was $40,000,000 up from $30,000,000 last year. As you could see, both countries and all sales channels contribute positively to the increase in EBITDA. The negative effect from other is mainly the onetime project in spot on and other non recurring items.

EBITDA margin in Q2 was 10.8%, up from 8.7% last year. Adjusted EBITDA for the quarter was $41,000,000 up from $33,000,000 last year. The improvement is driven by improved gross profit of $50,000,000 EBITDA excluding IFRS 16 FX for the quarter was $14,000,000 up from $7,000,000 last year. Net change in cash for the period was minus $41,000,000 Increase in working capital is mainly a result of new store and seasonal movements. Cash flow from investments of $6,000,000 are mainly maintenance CapEx and purchase of the 8% in spot on.

Electrogram is now holding 100% of the shares in spot on again. Cash flow from financing of minus $21,000,000 consists of lease payments. The IFRS 16 interest expenses of $6,000,000 relating to the lease payments are included in interests. As a result of this, we have available cash of $55,000,000 at the end of second quarter. In addition, we have an unused overdraft facility of 120,000,000 Excluding IFRS 16 FX, net interest bearing debt was SEK 190,000,000 at the end of the quarter, which corresponds to 2.3x the last twelve months and GAAP EBITDA adjusted for the write down of SOLAR of SEK 10,000,000.

The loan facilities had a net interest bearing debt EBITDA covenant of NOK 4,000,000 at the end of the quarter. Then I hand over to Andreas again, which will take you through the events after the period and the outlook.

Andreas Niss, CEO, Electric Returns: Thank you, Jurgen. As mentioned, SpotOn is now fully integrated back in in Electrum Turn with some minor restructuring cost that was completed in July. July sales is growing compared to last year in both b to b and b to c despite a very warm summer. It’s very seldom that we see three weeks in a row with 30 degrees in Norway and Sweden. But despite that, we have a growth of fifth 5.8%.

No specific events in Sweden after q two, but also a positive sales the positive sales trend in Sweden continues. Looking at the market, we still experience some cautiousness in the private consumption. However, there are macroeconomic indicators that history historically have impacted our industry positively. Interest rates are down and residential exchange is increasing compared to last year. That usually is positive for our sales.

That was all we had for the presentation, so we open up for questions.

Trond, Moderator/Host, Electric Returns: Okay. So please submit your questions, and we’ll start off with the first one here. What was EV charter sales in q two?

Jurgen Wist, CFO, Electric Returns: 36,000,000.

Trond, Moderator/Host, Electric Returns: Okay. And the next one, how many stores do you aim to have in Sweden in the long term?

Andreas Niss, CEO, Electric Returns: We don’t have a target for that to discuss here at least What what we have said, as we said in the presentation, is that we’re now starting to look for store number two and three, and we will build from there. But, I mean, obviously, if we succeed with those, there is there is there’s there’s room for a lot of stores in Sweden as well.

Trond, Moderator/Host, Electric Returns: K. And how how much of the COGS is related to shipping and freight? How should they think about the impact from freight rates going into HOTU, h two?

Jurgen Wist, CFO, Electric Returns: As of now, there is a percentage of the cost of 4%.

Trond, Moderator/Host, Electric Returns: Okay. Could you give some more insights in what is driving sales in Sweden in terms of mix between new and existing customers?

Andreas Niss, CEO, Electric Returns: Well, the the largest growth in percentage is by far b to b customers in our stores. We have managed to we have succeeded in attracting smaller electrician companies in in the in the local area around the store, which is, well, more more than we thought we could, but that’s where the largest growth is coming from. But also in terms of not just percentage, but in terms of of revenue, there is an increase in profit sales in our online store.

Trond, Moderator/Host, Electric Returns: Yep. I think that was all the questions as of now. So maybe we will just give it twenty seconds and see if anyone else have any questions.

Andreas Niss, CEO, Electric Returns: Yep.

Trond, Moderator/Host, Electric Returns: Seems to be no more questions, so I think we can finish it up. And any closing remarks from you?

Andreas Niss, CEO, Electric Returns: No. Just thank you very much for dialing in. Yep. Thank

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.