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2022-07-22

Profoto Interim Report Q2 2022

Stable demand but revenues affected by delays in component deliveries – not expected to affect the full year

Financial summary April – June 2022

  • Net sales totaled SEK 187m (172), an increase of 8.6 percent. Organic growth adjusted for currency effects was -12.7 percent.
  • EBIT totaled SEK 48m (36), an increase of 33.2 percent, and 7.0 percent when adjusted for currency effects. The EBIT margin was 25.6 percent (20.9).
  • Adjusted EBIT totaled SEK 46m (53). Adjustments during the quarter were related to reduced acquisition costs of SEK 2m. Adjustments for the second quarter of 2021 were related to IPO costs of SEK 17m. Adjusted EBIT margin for the quarter was 24.5 percent (30.7).
  • Profit for the period increased to SEK 36m (22).
  • Cash flow from operating activities totaled SEK 39m (54).
  • Earnings per share (basic and diluted) 2 totaled SEK 0.90 (0.56).

Financial summary January – June 2022

  • Net sales totaled SEK 383m (325), an increase of 17.9 percent. Organic growth adjusted for currency effects was 2.7 percent.
  • EBIT totaled SEK 103m (76), an increase of 35.9 percent and 26.3 percent adjusted for currency effects. The EBIT margin was 26.8 percent (23.3).
  • Adjusted EBIT improved to SEK 111m (100). Adjustments for the half year were related to acquisition costs of SEK 8m. Adjustments for the six-month period in 2021 were related to IPO expenses of SEK 25m. The adjusted EBIT margin was 28.9 percent (30.9).
  • Profit for the period increased to SEK 76m (54).
  • Cash flow from operating activities totaled SEK 93m (96).
  • Earnings per share (basic and diluted) totaled SEK 1.89 (1.34).

Significant events during the second quarter

  • As part of the strategy to expand in automated e-commerce photography, Profoto Holding AB (publ) acquired all the shares in the Dutch company StyleShoots Holding B.V. on April 6, 2022. The purchase price totaled EUR 18m on a cash and debt-free basis, corresponding to SEK 186m. For more information on the acquisition, see Note 6.
  • At the Annual General Meeting on May 5, a dividend of SEK 140m, equivalent to SEK 3.50 per share, was declared and paid on May 12.



Key ratios
Group

Apr–Jun 2022

Apr–Jun 2021

Jan–Jun 2022

Jan–Jun 2021
Jul 2021
–Jun 2022

Full year 2021
Net sales, SEKm187172383325791732
Net sales pro forma*, SEKm192407365863820
EBIT, SEKm483610376239212
EBIT pro forma*, SEKm3610376242215
EBIT margin, %25.620.926.823.330.228.9
EBIT margin pro forma*, %19.025.320.928.126.2
Adjusted EBIT, SEKm4653111100247237
Adjusted EBIT margin, %24.530.728.930.931.332.3
Profit/loss for the period, SEKm36227654180158
Cash flow from operating activities, SEKm
39

54

93

96

237

240
Net debt, SEKm120-14120-14120-134
Net debt/EBITDA LTM0.40-0.090.40-0.090.40-0.50
Earnings per share0.900.561.891.344.503.95

* Pro forma includes StyleShoots Holding B.V. as if the acquisition had taken place on January 1, 2021.

CEO Comment
Stable demand but revenues affected by delays in component deliveries – not expected to affect the full year

The market and order intake have been stable in the second quarter of 2022. Unfortunately, we were hit by late deliveries of components during the quarter, which resulted in a shift in sales from the second to the third quarter. This is not expected to affect the full year. In total, our sales amounted to SEK 187m, which was slightly higher than the same period last year and corresponding to a growth of 9 percent including the acquisition of StyleShoots. Organic growth adjusted for currency effects totaled -12.7 percent. Our profitability during the quarter has remained high, with an EBIT margin of just over 25 percent. This is a slight decline from previous high levels, partly influenced by delays in component deliveries and a lower level of sales. It is also affected by Style- Shoots, which has lower margins than Profoto.

The acquisition of StyleShoots strengthens our e-commerce offering
The acquisition of StyleShoots, completed in April, is strategically appropriate as it strengthens our offer to e-commerce businesses. This is an area where we see strong continued demand and opportunity to drive our growth. As we wrote earlier, what Profoto can bring to StyleShoots is our experience in growing, selling and distributing globally. During the quarter, StyleShoots started work on establishing its own sales organization in the US and is expected to be operational during the third quarter. StyleShoots has a good track record of profitability, although it is not on par with Profoto’s. However, we will focus more on growth and product development than on increasing profitability at this stage. There are great opportunities!

Two product launches during the quarter
At the end of this quarter, Profoto completed two product launches. One is a new remote control – Profoto Connect Pro with new and much-requested functionality. We also launched the Profoto A2, a small, handy and powerful flash which is perfect for photographers who work on-location. For example, portrait and wedding photographers. The products were launched at the end of the quarter and generated strong interest, which is expected to have a positive impact on future sales.

Generally speaking, our markets in Europe have been stable, as in Japan. China strengthened slightly in June, as some cities gradually reopened after being on lockdown at the beginning of the quarter. In the US, however, we saw some hesitation in May, before returning to a normal level in June. Looking at our different customer segments, demand remains strong from studios working with individual brands, which account for a significant part of Profoto's volumes. We see some hesitation from individual photographers due to inflation and interest rate fears and lower growth in demand from broad e-commerce companies.

Confident in our financial targets
So what to think about Profoto going forward? We are confident in our financial targets, i.e., to over time, achieve a constant currency annual organic growth in net sales of above 10 percent and to have a profitability in terms of EBIT margin between 25 and 30 percent. We look forward to delivering a stronger second half.

Launch of Share the Light
We tirelessly pursue our mission to support creative professional photographers in realizing their ambitions, and we do this by developing and launching new products and being a source of inspiration for creating amazing photos using lighting. That's why we've launched Share the Light, a platform where professional photographers inspire each other on how to create better images using lighting. This is what pushes us...

Författare MFN