Equity research Zinzino, Q3 2024: Growth target confirmed, expansion weighs on margins

Today Zinzino published its interim report for Q3 2024. Below is a compilation of our first impressions of the outcome, including deviations from our updated estimates.

The Q3 2024 report highlights sustained strong revenue growth of more than 20 per cent. The company states that it will achieve its growth target for the year, further supported by the preliminary sales figures for October released on 4 November. However, margins in the quarter were lower compared to last year. We had expected a decline from a strong comparison period. However, the impact of higher raw material costs and increased operating costs related to e.g. acquisitions and new markets was greater than anticipated. We anticipate a slight downward reaction in the share.

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

• Total revenues increased by 22% in Q3 2024 to SEK 532m, in line with the preliminary sales figures reported on 3 October.
• Gross profit grew by 7% to SEK 179m, compared to our forecast of SEK 181m. Year-over-year, the gross margin decreased by 1.6 percentage points to 33.6%. Our updated forecast was 33.9%.
• Year-over-year, the EBITDA result declined by 11% to SEK 63m, corresponding to a margin of 11.8%. Our updated estimate was for SEK 69m, corresponding to a margin of 13 %.
• The EBIT result fell year-over-year by 15% to SEK 55m, corresponding to a margin of 10.2%. Our updated estimate was for SEK 63m, corresponding to a margin of 11.7%.

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