Lyko Group (Sell, TP: SEK95.00) - Waiting for further positive signs

For Q3, we are slightly above consensus on EBIT but below on net profit. We expect Lyko’s results to be weighed down by continuously high financial costs. In our view, focus will remain on its European market, the efforts to improve its group gross margin, and the cash flow position (net debt/EBITDA of c4.4x at end-Q2). We reiterate our SELL and SEK95 target price, reflecting its stretched balance sheet and our belief that it will take time to properly balance growth and profitability.

E-handelsindikatorn +1% for August

E-commerce traffic - August 2024

Small Cap Miner – August 2024

Boozt (Hold, TP: SEK120.00) - Set for volatile H2

Boozt narrowed its 2024 guidance to better reflect the soft Nordic consumer sentiment and we believe H2 could prove volatile and backend-loaded. We note signs of headwinds (e.g. lower campaign buys) that could put pressure on margins but find the inflow of new customers and greater customer activity encouraging. We reiterate our HOLD, but have cut our target price to SEK120 (130), mainly due to lower estimates.

More fulfillment improvements in the works

Steady as she goes

Boozt (Hold, TP: SEK130.00) - Soft Q2

We consider this a soft report for Boozt, including Q2 adj. EBIT c5% below consensus and a narrowed full-year guidance. The soft results were mainly driven by a slightly higher gross margin versus consensus, offset by higher-than-expected opex, with the latter hit by temporarily higher fulfilment costs related to manual hours needed to build and test the new transfer cells at its fulfilment centre. Based on the mid-point of the new adj. EBIT guidance for 2024. We expect a slightly negative share...

Better variable cost base offset by admin

Staffing up took 4pp off the adj. EBIT margin

Note monthly differences in comps

Highlighting the cash yield story

Getting leaner and leaner

Soft top-line momentum continues. We extrapolate Q2 for 22% lower '24e adj. EBITA. We reiterate BUY and leave our SEK 22 TP unchanged.

Lyko Group (Sell, TP: SEK95.00) - Mixed quarter

Although it is too early to draw any firm conclusions, Q2 showed some positive signs, with improved EBIT margins YOY across the company’s regions and a stronger cash position. However, the gross margin continued to narrow, and current debt is pressured at a net debt/EBITDA of 4.36x. We reiterate our SELL and SEK95 target price.

No end in sight for Nordics growth

Strong growth of 22% y-o-y, positive Europe signals. Marketing ratio -60 bp y-o-y despite large campaign. We reiterate BUY and our TP of SEK 170.

Lyko Group (Sell, TP: SEK95.00) - Mixed signals in Q2

Soft Q2 report. Despite EBIT margin growth in both regions and stronger FCF, the gross margin was below consensus, the high financial expenses offset net profit (which was negative) and the company’s net debt/EBITDA (including IFRS16) grew to 4.63x. We expect consensus 2024–2025e EBIT and net profit to come down by 2–4% and c40–16%, respectively. We believe a negative share price reaction is warranted today.

Europe back to growth with better margins

Better margins, market remains tough

Conversion rate gains vs AOV declines

Q2 report due 15 August. We forecast net sales of SEK 133m, EBIT of SEK 10m. We reiterate BUY and lower TP to SEK 70 (80).

Boozt (Hold, TP: SEK130.00) - Neutral Q2e, focus on H2e

We are neutral ahead of the Q2 results, expecting adj. EBIT only slightly below consensus. We forecast good sales in May to be offset by a weak June, along with fewer campaign buys weighing on the gross margin. We reiterate our HOLD, but have reduced our target price to SEK130 (135) on our lower estimates.