Half Year 2026 Broedrene A & O Johansen A/S Earnings Call Transcript
Key Points
- Record Q2 sales with 11.6% growth, exceeding expectations despite a tough winter.
- Gross margin improved to 24.6%, driven by B2B margin increase of 0.4% and B2C margin increase of 1.8%.
- Strategic acquisitions (JMV Cables and Elektroimportoren) expand market presence in Scandinavia and strengthen product assortment.
- EBITDA increased 21% year-over-year to DKK113 million, with earnings slightly above expectations.
- Revised upward guidance for organic revenue and EBITDA, reflecting strong performance and acquisition contributions.
- Intense margin pressure persists, especially in project sales, due to lower demand relative to wholesale capacity.
- Cost of doing business ratio remains at 17.9%, with increased investments offsetting scale benefits.
- Geopolitical tensions and uncertainty have led to increased inventory levels by approximately 5%, tying up cash.
- Working capital increased by DKK60 million year-over-year, partly due to higher activity and inventory buildup.
- Transaction costs of approximately DKK20 million related to acquisitions will impact earnings, and the full impact of Elektroimportoren is not yet included in guidance.
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Welcome to our second quarter and first half of '26 webcast. Let us look at some of the highlights of the second quarter. It is indeed busy times in AO. We are excited about the M&As and the massive investments in the future that we are carrying out. But we are just as satisfied that our daily business is showing strong development even stronger than we expected.
AO saw the highest second-quarter sales ever. We saw a growth of 11.6% in Q2. B2B grew revenues by 10.9% and B2C saw 15.4% growth. Excluding VVS-Eksperten, the organic growth was 10.6%. I am particularly satisfied to note that the growth in Q2 and first half of 2026 now exceeded our expectations despite the tough winter which has a negative impact on the month of February. Based on the higher-than-expected growth in Q2, we revised our guidance and Per will walk us through the updated guidance later.
Gross margin improved 24.6%. Overall margins increased from
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