On the right track
April –
- Net revenue decreased by 2%, totalling
SEK 441 (450) million. - EBITDA totalled
SEK 17 (1) million. Adjusted EBITDA wasSEK 21 (3) million, equivalent to a margin of 4.7% (0.6%). - Operating profit (EBIT) was
SEK 2 (-11) million. Adjusted operating profit (EBIT) wasSEK 6 (-9) million and the adjusted operating margin was 1.5% (-2.1%). - Cash flow for the period was
SEK 64 (-10) million. - Profit/loss for the period amounted to
SEK 26 (-1) million. - Earnings per share before and after dilution was
SEK 0.33 (-0.01).
January –
- Net revenue decreased by 10%, totalling
SEK 786 (870) million. - EBITDA totalled
SEK 9 (2) million. Adjusted EBITDA wasSEK 13 (3) million, equivalent to a margin of 1.7% (0.4%). - Operating profit (EBIT) was
SEK -19 (-23) million. Adjusted operating profit (EBIT) totalledSEK -15 (-21) million and the adjusted operating margin was -1.9% (-2.5%). - Cash flow for the period was
SEK 31 (4) million. - Profit/loss for the period amounted to
SEK 15 (-15) million. - Earnings per share before and after dilution was
SEK 0.18 (-0.38).
Apr-Jun | Jan-Jun | Jan-dec | |||||
SEKm (unless stated otherwise) | 2023 | 2022 | 2023 | 2022 | 2022 | ||
Net revenue | 441 | 450 | 786 | 870 | 1,585 | 1,670 | |
Growth (%) | -2% | 0% | -10% | 6% | -4% | 5% | |
Growth in local currencies (%) | -7% | -3% | -14% | 3% | -8% | 1% | |
Gross profit | 186 | 178 | 323 | 350 | 629 | 657 | |
Profit after variable costs | 88 | 69 | 142 | 132 | 262 | 252 | |
Overhead costs | -67 | -66 | -129 | -128 | -256 | -256 | |
Operating profit (EBIT) | 2 | -11 | -19 | -23 | -65 | -68 | |
Adjusted operating profit (EBIT) | 6 | -9 | -15 | -21 | -47 | -53 | |
Profit/loss for the period | 26 | -1 | 15 | -15 | -28 | -58 | |
Gross margin (%) | 42.1% | 39.5% | 41.1% | 40.2% | 39.7% | 39.3% | |
Profit after variable costs (%) | 20.0% | 15.3% | 18.1% | 15.1% | 16.6% | 15.1% | |
Adjusted operating margin (EBIT) (%) | 1.5% | -2.1% | -1.9% | -2.5% | -2.9% | -3.2% | |
Cash flow for the period | 64 | -10 | 31 | 4 | 144 | 117 | |
Net debt (+) / Net cash (-) | -179 | 176 | -179 | 176 | -179 | -136 |
Significant events during the reporting period
- On
12 June 2023 Göran Dahlin was appointed as new CEO ofPierce Group AB , replacingWillem Vos , former Acting CEO. - On
16 May 2023 the Annual General Meeting approved to introduce a long-term incentive program in the form of a performance share program for the Company’s CEO, Group Management and key employees. A maximum number of 950,000 ordinary shares can be issued in this program. - On
16 May 2023 the Annual General Meeting resolved to electLottie Saks as new ordinary board member and chair of the audit committee. Board members Gunilla Spongh,Shu Sheng andThomas Ekman declined re-election. - The Group has a credit facility with one of the larger Swedish banks. During the reporting period the available credit facility, which is not utilized, was reduced by agreement from
SEK 200 million toSEK 150 million .
Significant events after the end of the reporting period
No significant events took place after the end of the reporting period.
CEO comments
It is now a little more than two months since I became CEO of
Margins continue to improve, at the same time liquidity has strengthened
The significantly improved liquidity since the end of 2022 has been maintained to ensure that we can focus on margin-improvement measures. We now see, for the first time in more than two years, an improved gross margin compared with the same period last year. However, the outlook for the forthcoming quarters is demanding. We will therefore continue to prioritize margin reinforcements, operational excellence and strong liquidity, primarily through a conservative approach in our go-to-market initiatives.
Net revenues decreased by 2 percent during the quarter versus the corresponding quarter last year and totalled
Increased consumer prices, together with lower shipping costs, resulted in an improved gross margin of 2.6 percentage points versus the previous year, coming in at 42.1 percent. Compared with the first quarter, the increase was 2.4 percentage points. Shipping costs in relation to net revenue totalled 4.9 percent, which was a decrease of 1.8 percent compared with the second quarter 2022. Shipping prices are at a low level and we expect gradual further cost reductions during the coming quarters. However, these positive effects were to some extent offset by increased purchasing prices from previous year – the cost increases affected inventory value directly but filter into cost of goods sold only as we sell the products.
The strengthened gross margins, together with lower direct costs, resulted in an adjusted EBIT of
Net cash increased by
Uncertainty in the forthcoming quarter
The market continues to be difficult and uncertain. The uncertainty means that our cautious approach is intact when planning our go-to-market initiatives and we prioritize continued margin strengthening over sales volumes. At the same time, we are concentrating on implementing the profitability improvement program which was launched last year in combination with ongoing cost controls. The effects of these measures can be seen in our results, primarily through increases in customer pricing but also through reduced direct costs for marketing and distribution chain. Direct costs in relation to net revenue decreased by 2.0 percent compared with the second quarter 2022.
Number of newly registered motorcycles continues to grow
In the longer perspective, we believe that the prospects for sustainable market growth will persist. In spite of inflation and challenging macro conditions, both 2021 and 2022 saw an annual increase in the number of newly registered motorcycles in the five largest countries in
In addition to our focus on improving profitability in the near term, Pierce’s strong liquidity and the positive effects yielded by our profitability improvement measures give space to work with enhancing our customer offering and the effectiveness of our operation through a post-Covid re-assessment and re-calibration of the strategy.
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