Sweden's Meko Q2 profit margin improves on targeted savings in Poland, Finland
Sweden's Meko Q2 profit margin improves on targeted savings in Poland, Finland
Overview
Sweden automotive parts distributor's Q2 net sales rose 1% yr/yr, organic growth flat
Adjusted EBIT for Q2 rose 32% yr/yr, margin improved to 5.0%
Profitability gains driven by cost reductions and targeted savings in Poland and Finland
Outlook
Company maintains target for net debt to EBITDA between 2.0 and 3.0
Company sees varied market conditions with competition among spare parts wholesalers
Meko pursuing growth initiatives in response to trends like EV adoption and digitalization
Result Drivers
COST REDUCTIONS - Co said profitability gains were driven by continued cost reductions and targeted savings, especially in Poland and Finland
VARIED MARKET CONDITIONS - Co said market conditions were mixed, with growth in Finland and Poland/The Baltics, flat in Denmark, and declines in Sweden/Norway and Sørensen og Balchen
OPERATIONAL OPTIMIZATION - Co continued to optimize operations through price analyses, supplier agreement updates, and efficiency improvements
Company press release: ID:nMFN3cNsZm
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Slight Miss* | SEK 4.56 bln | SEK 4.58 bln (2 Analysts) |
Q2 Adjusted EPS |
| SEK 1.42 |
|
Q2 Adjusted EBIT | Miss | SEK 232 mln | SEK 240.50 mln (2 Analysts) |
Q2 Adjusted EBIT Margin |
| 5.00% |
|
Q2 EBIT |
| SEK 199 mln |
|
Q2 EBIT Margin |
| 4.30% |
|
Q2 Organic Growth |
| 0.00% |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the auto vehicles, parts & service retailers peer group is "buy."
Wall Street's median 12-month price target for Meko AB is SEK94.00, about 19.1% above its July 22 closing price of SEK78.90
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 6 three months ago
Reuters Recommended Reads
July 21 - Genuine Parts Q2 revenue beats on comparable sales growth; plans business separation in Q1 2027
July 23 - Electrified cars drive Europe auto sales growth as Chinese brands gain ground
July 22 - Penske, Mitsui make $3.8 billion offer to take auto retailer Penske Automotive private
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)