Gold prices steady ahead of Fed decision; weekly weakness noted
Elektroimportoren reported its Q4 2024 earnings, showcasing a revenue increase of 5.2% year-over-year, reaching $520 million. The company’s stock price rose by 4.23% following the announcement, reflecting positive investor sentiment. According to InvestingPro data, the stock has delivered an impressive 58.6% return over the past year and is currently trading near its 52-week high of $1.25. Analysis suggests the stock may be undervalued based on InvestingPro’s Fair Value calculations. Key factors contributing to this growth included an enhanced focus on smart home products and energy-efficient solutions, as well as operational improvements in both Norway and Sweden.
Key Takeaways
- Q4 revenue rose by 5.2% compared to the previous year.
- Net profit improved significantly, reaching SEK 41 million.
- Stock price increased by 4.23% post-earnings announcement.
- Expansion plans include 10 new stores in Norway.
- Double-digit growth expected in Sweden for Q1 2025.
Company Performance
Elektroimportoren demonstrated robust performance in Q4 2024, with a total revenue increase of 5.2% year-over-year. The company showed resilience in a competitive market by focusing on smart home innovations and expanding its store network. The Norwegian market saw like-for-like sales growth of 1.8%, while sales in Sweden surged by 19.4%.
Financial Highlights
- Revenue: $520 million, up 5.2% YoY
- Full Year Revenue 2024: NOK 1,627 million, up 1.4% YoY
- Q4 Gross Margin: 34.8%, improved from 32.8% last year
- Adjusted EBITDA: NOK 170 million, up from NOK 137 million in 2023
- Net Profit: SEK 41 million, improved from a negative SEK 12 million
Outlook & Guidance
Looking forward, Elektroimportoren plans to expand its geographical footprint by opening 10 more stores in Norway and focusing on growth opportunities in Sweden. With an overall Financial Health Score rated as "GOOD" by InvestingPro, the company appears well-positioned for this expansion. Discover comprehensive analysis and detailed growth projections in the Pro Research Report, available exclusively to InvestingPro subscribers. The company is optimistic about capturing market share in the smart home and energy solutions sectors. Early indicators for Q1 2025 suggest double-digit growth in Sweden and approximately 7% growth in Norway.
Executive Commentary
CEO Andreas Nes emphasized the company’s commitment to being a comprehensive provider of electrical equipment, stating, "Being a total provider of electrical equipment for everything needed to build and maintain a house is key to us." He also highlighted the company’s improved position, saying, "We are in a much better shape today than we were twelve months ago."
Risks and Challenges
- Potential supply chain disruptions could impact product availability.
- Market saturation in the electrical equipment sector may limit growth.
- Economic fluctuations in key markets could affect consumer spending.
- Increasing competition in the smart home product market.
- Regulatory changes in energy efficiency standards could pose challenges.
Q&A
During the earnings call, analysts inquired about the cost savings from the SpotOn integration, which amounted to NOK 8 million. The company also provided insights into its expectations for the new Skagen store, which is projected to become a top-five store with annual sales of 60-70 million.
Full transcript - Elektroimportoren As (ELIMP) Q4 2024:
Mona Katrin, Webcast Moderator, Elektorin Perturne: Good morning and welcome to the Q4 webcast of Elektorin Perturne. If you have any questions, please use the written Q and A function during the presentation and management will address these at the end of the presentation. And with that, I will leave the word over to CEO Andreas Nes and CFO Jorgen Wiss.
Andreas Nes, CEO, Elektorin Perturne: Thank you for that, Mona Katrin, and good morning, everyone, and thank you for joining us for this Q4 presentation. I will start with running you through a short operational and financial summary for the fourth quarter and then sum up the 2024 financials. After that, I’ll give you an overview of our strategic key areas going forward and give you an operational update. Jorgen will then take you through the financials and then we finish off with an outlook and a Q and A session. Q4 started good.
October had a good growth, just slightly. And when we went into November we managed to just slightly beat last year numbers. Moving into the last month of the year in December we actually managed double digit growth. We have continued to work for improvements in margin and category management and this has led to gross margin improvements. We have managed to increase sales whilst decreasing cost driving operational improvements in both countries.
Number of visitors in Norway was up 6% in our stores and we see cost reductions made during previous quarters coming through. We opened one new store in the quarter and signed a lease for another store in Norway. Financial summary for the quarter. Total (EPA:TTEF) revenue of $520,000,000, which is up 25,000,000 from last year, which is an increase of 5.2%. Like for like growth in Norway was at 1.8% and online sales in Norway grew by 5.4% and in Sweden we increased sales by 19.4%.
Gross margins are up 2% from 32.8% last year to 34.8% in Q4 this year. Operating expenses are decreased by $3,000,000 despite two new stores in the quarter and we delivered an adjusted EBITDA of $67,000,000 and an EBITDA of $66,000,000 which is up by $20,000,000 from last year. Net profit of SEK23 million is up from SEK7 million last year and finally, cash flow from operations landed at SEK76 million for the quarter. If you look at the full year 2024, our revenues increased by 1.4% to NOK 1,627,000,000.000. In Norway, like for like sales were down 1.8%.
Online sales increased by 1% and in Sweden, we managed to increase sales with 12.7%. The non new stores in Sweden, so this is like for like growth in our neighboring country. Gross margin percentage for the year is slightly up 34.5% versus 34.7% and OpEx is decreased over the year with NOK 20,000,000. Our adjusted EBITDA increased from NOK 137,000,000 in 2023 to NOK 170,000,000 in 2024, and the EBITDA ended at NOK 150,000,000, up from NOK 136,000,000 last year. Net profit of SEK 41,000,000, which is up from a negative SEK 12,000,000 last year and cash flow from operations
Jorgen Wiss, CFO, Elektorin Perturne: of SEK
Andreas Nes, CEO, Elektorin Perturne: 184,000,000. The year started out challenging. We made necessary adjustments and we have seen the results of these adjustments coming through in the second half of the year. Fact is that we as a company are in a much better shape today than we were twelve months ago. Moving into 2025 and beyond, we will focus our efforts on strengthening the key parts of our concept and make sure that we capitalize on the market opportunities that comes our way.
Being a total provider of electrical equipment for everything needed to build and maintain a house is key to us. We believe that our local presence with our physical stores together with a well functioning online platform will continue to be the most important thing we do. We continue to look for new store locations and we believe that there is still room for 10 more stores in Norway. First One being just around the corner opening in April. To win locally is what we’re all about.
We will continue to invest in being the specialist in our sector. Having trained electricians servicing both our B2B and B2C customers is not only essential for the safety of our customers, but also builds trust and loyalty over time. Our own brands, working alongside the most well known brands in our industry, is key to our profitability and what gives us the opportunity to invest in better customer experiences. We will continue to focus on delivering quality products in all our categories, making sure that both we and our suppliers stay in front of the technical development. Growth in the coming years will except for us building new stores and growing our like for like business primarily come from our ability to capture new market opportunities, gaining proof of concept in Sweden and expanding geographical geographically.
This will undoubtedly be a big opportunity. We’re not fully there yet but we continue to move in the right direction with our Swedish business. The growth of smartphone products and energy efficient solutions will be key to outperform market growth in the years to come. Here we have positioned ourselves in the forefront and will continue to do so going forward. With an expected increase in people moving and new build projects coming back on track, there should also be a possibility for somewhat better market conditions for the later part of 2025.
There are many indications that demand for energy in terms of electricity will grow in the coming years. Us being a provider within the electricity sector with local market presence, best in class service and specialist advisory of quality products gives us confidence in that we should be able to capture capture the opportunities that the future will bring. Bringing this into Q4 performance, we had had a successful opening of store twenty nine in Norway located at Skagen in Oslo. We have signed a contract for a new store in Lillehammer, which we aim to open before summer. Spot on sales increased from 11,000,000 last year to 14,000,000 this quarter and we have managed to grow both in b2b and b2c gaining market share in a b2b in a in a rough b2b sector.
We had a slight increase in number on share business up 0.4% from last year. In terms of category performance, we had the greatest growth in our largest categories electrical material, smart home products, cables and lightning. The warm winter have made heating sales decline, unfortunately. Our Swedish business grew by almost 20% and this is as I said like for like growth and we managed to grow also grow increase gross margins in Sweden. The number on share of business was at 10.2 in Sweden, which is up from 8.5 last year.
Looking even deeper into Sweden, revenue increased by 19.4% compared to last year. Gross margins up by 6.2%. Increasing share of business from B2B segment are, of course, influencing the margin actually in a negative way. So the total margin improvement is a great job done. Our plan for getting Sweden back to profitability shows early positive signs.
We still have a way to go and we are continuously exploring opportunities for improving our profitability. EBITDA in Sweden increased from minus 8,000,000 last year to 1,000,000 this year. Looking at customers, visitors increased by 6% in Norway. Average basket size is moderately up and conversions rates are slightly down. We managed to grow sales as I said in B2B and B2C and and the customer split for the quarter is fiftyfifty B2B B2C with 50% consumers, 40% electricians and 10% other businesses.
Brand knowledge and perception is important to us. We have now reached a prompted brand knowledge of 77% and perception of highly skilled staff is above 70%. These are key metrics to us measuring the brand of Electron in return and its performance. And with that, I will hand over to Jorgen for some more details on the financials.
Jorgen Wiss, CFO, Elektorin Perturne: Thank you, Andreas. We start with the revenue, which has increased in both countries and all sales channels during the quarter. This resulted in revenue of $520,000,000 corresponding to an increase of 5.2% compared to last year. The like for like revenue growth in Norway was 1.8% in the quarter. B2C revenue increased by 8.6%, while B2B revenue increased by 1.1.
Online revenue in Norway increased by 5.4% in Q4 compared to last year. The store in Elbitik contributed 10,000,000 in revenue for the quarter, while on run revenue in Elbitik was 40,000,000. B2B revenue in Sweden in the quarter is included with 9,000,000. Other revenue is mainly solar projects, invoiced from our project department, and not sold through our stores. Solar orders were 4,000,000 in the Q4, down from 8,000,000 last year.
Invoice solar projects in the quarter were 5,000,000 and an order backlog of 1,000,000 at the December 2024. Gross profit for the quarter was 181,000,000, up from 162,000,000 last year. This translated into a gross margin of 34.8% compared with 32.8% in the same period of 2023. Overall, margin were impacted by the shift towards B2C with higher margin. In addition, gross profit in 2023 were impacted by inventory accounting and provisions of 7,000,000.
In Norway, the gross margin was 36.2% compared to 34.4 last year. The margin in Sweden is 22.4% compared to 16.1% last year. Margin on both B2C and B2B continues to increase in Sweden. Operating expenses are reduced with 2,000,000 compared to last year. Even with generally salary increase, inflation adjustments of costs, and two new stores.
OpEx to sales ratio at 22% compared to 23.6% last year. The group continues to maintain our 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 66,000,000, up from 46,000,000 last year. EBITDA margin in Q4 was 12.7%, up from 9.2% last year. Adjusted EBITDA for the quarter was 67,000,000, up from 46,000,000 last year.
The improvement is driven by improved gross profit of 19,000,000 together with cost reductions of 2,000,000. EBITDA excluding IFRS 16 effects for the quarter was 41,000,000, up from 25,000,000 last year. Net change in cash flow period was 42,000,000. Dollars Cash flow from operation was $76,000,000 driven by positive EBITDA and reduction in working capital during the quarter. Cash flow from investments of $7,000,000 are mainly maintenance CapEx and our new store at Skyon.
Cash flow from financing of minus 20 6 million dollars consists of lease payments and interest paid. As a result of this, we have available cash of $139,000,000 at the end of fourth quarter. In addition, we have an unused overdraft facility of 120,000,000. Excluding IFRS 16 FX, net interest bearing debt was 108,000,000 at the end of Q4. This correspond to 1.5 times the last twelve months and GAAP EBITDA.
The loan facilities have a net interest bearing debt EBITDA covenant of four at the end of Q4. Then I hand over to Andreas again, which will take you through the events after period and the outlook.
Andreas Nes, CEO, Elektorin Perturne: Yes. Thank you. As we have spoken about over the last year at least we have for a longer time been trying to find a partner for SpotOn - - that would bring a second craftsmanship area into SpotOn. We have not succeeded with this - - and we are therefore refocusing our efforts to only include electrician services. In doing so, we have also reduced operational costs during January.
We conduct a full handover to Electrum Turm to take place in the coming month. Sales in January started somewhat slow mainly due to loads of snow hindering customers to visit our stores. However, sales have picked up and we see stable sales and margins at the start of the first quarter. In Sweden, Peter Aslan have been appointed Managing Director. Peter has been with us since 2022 and has functioned as Assistant Managing Director for the last eight months.
Peter has more than twenty years of experience from retail servicing both consumers and professional customers. We noticed that there is an increase in residential sales and that gives us some reason to believe to have a cautious optimism for the market development going forward. That’s what we had. Now we open up for questions. And We cannot see any questions.
Jorgen Wiss, CFO, Elektorin Perturne: I don’t know if you if you see any.
Mona Katrin, Webcast Moderator, Elektorin Perturne: No. I cannot see any questions that have come in, yet. I don’t know if you wanna
Andreas Nes, CEO, Elektorin Perturne: something. Yeah. The other first question, it says, can you be more specific on the cost savings expected from the SpotOn integration? Yeah. Sure.
It’s a full year, 8,000,000 impact. Half of that, however, is CapEx, half of it is OpEx. So we’re looking at 4,000,000 this year and two of that will go to the bottom line and, but 4,000,000 cash impact. Can you expand a bit on how SpotOn will be integrated into Electrum Turn? Yes.
Well, during this time when we have tried to find a partner with another craftsmanship we have expanded mostly in our development team to make sure that we would have the capacity to develop new services for this oncoming partner. When this is not happening, we are reducing costs mostly in the development department. And and we will just continue to deliver what we have delivered so far, with SpotOn, which is best in class electrical installation digital service. So that will continue. But with the integration, we mean that we, SpotOn is a company standing alone until today or until January actually
Jorgen Wiss, CFO, Elektorin Perturne: and now we’re incorporating it back into our to the day to day running of Electrum Return. Next (LON:NXT) one is how much is sales up in Norway and Sweden in Q1 so far? The January account is not finished yet, but, from our, orders we see that there is a double digit growth in Sweden and also quite good growth in Norway for around 7% or something.
Andreas Nes, CEO, Elektorin Perturne: Something. Any more questions? You Okay. Then, Martina, I don’t know. Does it seem like there are any more questions?
Oh, there’s one more. Could you give some color on the performance of the Skagen store in terms of revenues? Well, I don’t want to put out the number of the store to be honest. But Skagen is performing a bit well, on an ambitious plan, I would say. We have the ambitious plans for for Scaen and and and thoughts about what the performance could be and we’re delivering on those.
That means that Scaen, over time, like, let’s say, like, twelve to twenty four months should be a top five store. And that means sales up around 60 to 70,000,000 a year. But we’re very happy with the scale in store and it’s performing well. In which segmentsmarkets do you see the best growth opportunities going forward? Well, the best growth opportunities first of all, I think we have a solid business in terms of when it comes to the basic well, our main categories like electro material, lightning, cables and smart home.
But the largest growth, I think, will come from more and more people using smart home products, more and more people having the need to be more energy efficient, using less electricity, getting the same comfort. And those products are it’s a combination of energy saving products and energy steering products which most of them are within the smart home category. And
Jorgen Wiss, CFO, Elektorin Perturne: see where a new store will be located, yeah. I think you said that already. It will be located in Lilamir. Lilamir. The plan is to open in April.
Yeah, and we have
Andreas Nes, CEO, Elektorin Perturne: a really big white space in, good Blasdallen. And we think that with all the cabins, people knowing us from other parts of Norway, I think we will have a good fit. Lilam is not a very big city in itself but with all the cabins that are within Hafjell, Cretefeld, etcetera, I think, the possibilities to run a good store in Lilam is are there.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.