E-commerce traffic - October 2024

E-handelsindikatorn +28% y-o-y for September

Lost sales growth to be found in Q4

Q3: slowdown across geographies

Q3e: 15% org. growth on tough comps

E-commerce traffic - September 2024

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

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

Lyko Group (Sell, TP: SEK95.00) - Europe meeting tough comparables

Being below consensus on EBIT and net profit, we are cautious ahead of Lyko’s Q2 report. We expect focus to be on comments on Europe, efforts to improve the gross margin, and its cash flow position (bearing in mind the net debt/EBITDA of c4.6x at end-Q1). We reiterate our SELL and SEK95 of target price, reflecting Lykos’ stretched balance sheet and uncertainty on how the company navigates growth and profitability.

Clear beneficiary of e-commerce recovery

Q2 report due 18 July. We forecast SEK 883m net sales, SEK 25m EBIT. We reiterate BUY, raise TP to SEK 170 (160).

E-commerce traffic – May 2024

We have evaluated Similarweb data for May. Aggregated traffic to e-commerce sites up 1% y-o-y. We see signs that RVRC's 20/20 strategy is bearing fruit.

E-commerce traffic - April 2024

We have evaluated Similarweb data for April. Aggregated traffic to e-com sites up 4% y-o-y. Rugvista traffic growth continues, don't fear RVRC's -19% y-o-y.

Lyko Group (Sell, TP: SEK95.00) - Stretched balance sheet

Following the Q1 report, we believe Lyko will not only have to make more substantial progress in balancing growth and cost control, but also consider new funding options more seriously. With financial expenses eating up earnings, its current debt position, and stretched balance sheet (net debt/EBITDA c4.6x), we have downgraded to SELL (HOLD) and cut our target price to SEK95 (128).

Early signs of margin improvements

Strong Nordics growth of 24% y-o-y. No automation capex in Q1, flat EBIT margins. We reiterate BUY and our TP of SEK 160.

Lyko Group (Hold, TP: SEK128.00) - Gross margin trend still negative

The Q1 report was weak, with the gross margin down c120bp YOY, a net loss, and a higher-than-expected net debt/EBITDA (incl. IFRS 16) of c4.6x. We expect consensus 2024–2025e EBIT to come down by c2–4% and net profit by c20–30%. We believe a negative share price reaction is warranted today.