Q2 2024 Stillfront Group AB (publ) Earnings Call Transcript
Key Points
- Stillfront Group AB (STLFF) reported strong margin development in Q2, with an EBITDAC margin of 29%, marking the highest margins in three years.
- The company achieved a significant increase in free cash flow, amounting to SEK272 million, nearly doubling from the previous quarter.
- Gross profit improved by 2 percentage points to 80%, driven by a focus on direct-to-consumer channels, which increased to 33% from 29% last year.
- The company successfully reduced staff costs by 12%, contributing to improved margins and operational efficiency.
- Stillfront Group AB (STLFF) announced a share buyback program, intending to purchase up to SEK80 million of shares, reflecting confidence in its financial position.
- Net revenues were down by 4% compared to the previous year, indicating challenges in maintaining top-line growth.
- The strategy segment experienced a clear slowdown in June, with bookings dropping by approximately SEK99 million.
- User acquisition costs remain high, with a significant portion of cash flow allocated to UA, impacting overall profitability.
- Monthly active users (MAU) and daily active users (DAU) saw a decline, reflecting challenges in user engagement and retention.
- The company faced a negative net working capital effect due to a reduction in liabilities, impacting cash flow from operations.
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Welcome to Stillfront's Q2 earnings call. I will be presenting, Jorgen Larsson, CEO, together with our CFO, Andreas Uddman. So next slide, please.
We posted strong margins. We had a strong margin development in the second quarter. We had net revenues coming at SEK1744 million, which is in line with Q1 and lower revenues by 4% compared to last year. We increased our gross profit by 2 percentage points, up to 80%. And we had an EBITDAC margin of 29%, up 8% quarter-over-quarter, driven by lower acquisition costs and up 0.5 percentage points year-over-year.
Our free cash flow amounted to SEK272 million, which is almost the doubling from the previous quarter. You can also see in the slide that we lowered our gross profit, which is the one that we are steering the business on by 1.6% only, and that is an important number.
Next slide, please. Looking into our lower user acquisition cost, there is a few highlights that I would like to emphasize on this
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