Equity research Zinzino: Profit growth despite pressure on gross margin in Q2 2024

Today Zinzino published its interim report for Q2 2024. Below is a compilation of our first impressions of the outcome, including deviations from our updated estimates.

The Q2 report highlights sustained strong growth in both revenue and profitability. However, the gross margin was negatively impacted by rising raw material costs. Deviations from our forecasts were minimal further down the income statement. The financial targets remain set at an average growth rate of 20% for the years 2024-2026, with an operating margin before depreciation and amortisation exceeding 10%. We anticipate limited movements in the stock.

We intend to provide an updated analysis on Zinzino shortly. Read the latest research update here.

• Total revenues increased by a solid 24% in Q2 2024 to SEK 507m. Our updated estimate was SEK 505m and the outcome was thus in line with our expectations.
• Gross profit grew with 18% to SEK 175m, compared to our forecast of SEK 184m. Year-over-year, the gross margin decreased by 2 percentage points to 34.4%. Our updated forecast was 36.4%.
• Year-over-year, the EBITDA result increased by 17% to SEK 63m, corresponding to a margin of 12.4%. Our updated estimate was for SEK 65m, corresponding to a margin of 12.8%.
• The EBIT result increased year-over-year by 19% to SEK 56m, corresponding to a margin of 11.0%. Our updated estimate was for SEK 57m, corresponding to a margin of 11.2%.
• EPS grew by 29% to SEK 1.41. Our updates estimate was SEK 1.31 per share.

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