SP Group Q3 Report 2023

Interim report – Third quarter of 2023

Summary: SP Group generated revenue of DKK 1,953.2 million in the 9M 2023 reporting period, a decline of 2.7% from DKK 2,007.5 million in 9M 2022. EBITDA was down by 8.6% to DKK 323.9 million from DKK 354.4 million last year, and profit before tax fell by 31.5% to DKK 139.0 million. FY 2023 guidance is maintained. SP Group continues to expect FY 2023 revenue to grow by 0-10% with an EBITDA margin of 16-19% and an EBT margin of 7-10%.

The Board of Directors of SP Group A/S has today considered and approved the interim report for 9M 2023. Highlights of the interim report:

• The 9M 2023 revenue was down by DKK 54.4 million to DKK 1,953.2 million, or by 2.7%, relative to the year- earlier period. Company acquisitions added DKK 45.0 million to consolidated revenue. Q3 revenue fell by 4.0% year on year.
• Earnings before depreciation, amortisation and impairment losses (EBITDA) for the 9M 2023 period were DKK 323.9 million, against DKK 354.4 million in 9M 2022. Company acquisitions added DKK 8.5 million to EBITDA. EBITDA declined by DKK 11.0 million in Q3 2023, for a 10.5% drop year on year.
• Depreciation, amortisation and impairment losses amounted to DKK 152.1 million, an increase of DKK 18.4 million relative to the same period last year as a result of investments made in 2022 and 2023. Amortisation and depreciation of acquired companies accounted for DKK 4.5 million of the increase.
• Profit before net financials (EBIT) came to DKK 171.9 million in 9M 2023, a 22.1% decline from DKK 220.7 million in the 9M 2022 period. EBIT for the third quarter was DKK 42.4 million, a 28.1% decline from DKK 58.9 million in Q3 2022.
• Net financials were an expense of DKK 32,8 million, a DKK 15.1 million increase relative to 9M 2022 that was due to higher interest rates, negative value adjustments and the servicing of a larger debt.
• Profit before tax (EBT) was DKK 139.0 million in 9M 2023, a 31.5% decline from DKK 202.9 million in 9M 2022. The Q3 EBT was DKK 31.1 million against DKK 49.4 million in Q3 2022.
• Earnings per share (diluted) were DKK 8.90 in 9M 2023, a 32.2% drop from DKK 13.12 in 9M 2022.
• Sales of our own brands were down by 16.0% in 9M 2023 to DKK 455.2 million. SP Group’s own brands accounted for 23.3% of 9M 2023 revenue. In the third quarter, the sale of own brands declined by only 8.4%.
• Sales to the cleantech and automotive industries increased during the reporting period, whereas sales to the healthcare (ergonomics), food-related industries and other demanding industries declined.
• There was a cash inflow from operating activities of DKK 288.6 million in 9M 2023, against a DKK 210.2 million inflow in 9M 2022.
•  Net interest-bearing debt (NIBD) amounted to DKK 965.2 million at 30 September 2023, against DKK 901.5 million at 30 September 2022. At 31 December 2022, NIBD amounted to DKK 1,034.5 million. NIBD was 2.2 times LTM EBITDA. NIBD fell by DKK 69.3 million in 9M 2023.
• SP Group continues to expect FY 2023 revenue to grow by 0-10% at an EBITDA margin of 16-19% and an EBT margin of 7-10%. However, due to the high rate of inflation, higher interest rates, volatile energy prices and the wars in Ukraine and Gaza, our levels of activity and cash flows over the coming months are subject to considerable uncertainty.