Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Europris ASA (LTS:0RAI, Financial) reported a significant group sales increase of 50.4%, with an organic growth of 4.4%.
- The company has successfully completed the acquisition of a Swedish discount retailer, adding around NOK 4 billion to the top line.
- Europris ASA has taken new market shares in Norway, showing sales growth above the market average.
- The integration of the Swedish operations is progressing according to plan, with positive contributions from employees and good spirits within the organization.
- Europris ASA received top scores in PricewaterhouseCoopers Climate Index for 2024, highlighting its commitment to sustainability and climate efforts.
Negative Points
- EBIT decreased by NOK 67 million, with a loss in the Swedish segment of NOK 45 million.
- The gross margin faced pressure due to a change in sales mix, higher freight costs, and currency depreciation.
- Net profit declined by NOK 60 million, impacted by unrealized losses on interest rate swaps.
- Cash from operating activities decreased significantly from NOK 734 million last year to NOK 365 million.
- The Swedish segment experienced stable footfall but faced challenges with low inventories and limited availability of nonfood goods.
Q & A Highlights
Q: Can you explain the change in gross margin for Europris ASA in Q3 compared to last year?
A: Stina Byre, CFO, explained that there was a decline of 1.3 percentage points in the gross margin, primarily due to a growth in consumables and higher campaign sales, which typically have lower margins.
Q: Do you expect to achieve lower than the previously guided 10% OpEx growth for the year?
A: Stina Byre, CFO, confirmed that they expect to deliver below the 10% OpEx growth guidance, despite some headwinds anticipated in the fourth quarter.
Q: Are you still confident in achieving a gross margin above pre-pandemic levels?
A: Stina Byre, CFO, stated that while they are confident in their strategies, the current product mix and sales share of consumables and campaigns have a dilutive impact on the gross margin.
Q: How do you anticipate the Christmas season will perform this year?
A: Espen Eldal, CEO, expressed optimism for a strong Christmas season, noting that they are well-prepared with sufficient stock and have seen positive sales trends in mini-seasons like Halloween.
Q: What are the key operational improvements expected in Q4, and could there be a positive EBIT margin?
A: Espen Eldal, CEO, highlighted the implementation of the same campaign strategies as in Norway, which are expected to drive sales and motivate staff, though significant EBIT changes in a single quarter are not anticipated.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
