Interim Report January 1 – March 31, 2024

Financial summary January – March 2024

• Net sales totaled SEK 171m (229), a decrease of 25.4 percent. Organic growth totaled -24.6 percent, and the currency effect, -0.8 percent.
• EBIT was SEK 34m (72), and the EBIT margin, 20.1 percent (31.3).
• Profit for the period was SEK 27m (56).
• The return on operating capital totaled 38.9 percent (94.0).
• Cash flow from operating activities was SEK 13m (105), mainly due to lower operating income and a reduction in operating liabilities during the quarter.
• Earnings per share (basic and diluted) totaled SEK 0.66 (1.40).

Significant events after the end of the period
• Launch of our new product platform Pro-D3. A series of off-camera flashes developed primarily for e-commerce customers with extensive demands for dependability and long product life.

CEO comment

Weak quarter but we can see the light at the end of the tunnel
Sales were SEK 171m, a decrease of 25 percent compared to the first quarter of 2023. The EBIT margin was negatively affected by the low sales, which nevertheless amounted to 20 percent (31) thanks to strict discipline in keeping costs in check.

Sluggish demand during the quarter
As in recent quarters, professional photographers and large studios alike continued to be cautious about investing in equipment, considering the uncertain macroeconomic environment and high interest rates. Underlying demand for our products therefore continued to be weak in all our regions. In a cautious market, we need to give customers convincing reasons to invest, to improve demand. Normally, our primary way to do this is by launching new, innovative products. We have not had any major product launches in the last few quarters, which combined with the cautious market, are the main reasons for the weak sales. To address this situation, we have had a lot of extra activities and attractive offers for professional photographers in connection with the important spring wedding season, which had a positive effect on the sales of our OCF and Clic products.

Launches that pave the way for the next quarter
We remain confident in our financial targets. To continue to meet our growth target, after several challenging quarters, we continue to invest a lot of energy and resources in product development. I am especially proud and happy that we can finally start to showcase the results of this dedicated work with the launch of our new monolight, the Pro-D3. The Pro-D3 is a true workhorse, aimed primarily at large studios and available for purchase since May 7.
I see it as marking the start of a very exciting time, with more frequent product launches than we have had over the past two years, enabled by our investment in innovation. In addition to investing in innovation and launching new products, we continue to raise our level of activity in the market and to further develop the way in which we launch and sell our products.

Increased focus on the US
We have three areas of light in which we are growing; our core area of Light for professional photographers, where we have been able to develop products and increase our market share and sales for many years. This is an important area that we will continue to invest in. Our two newer focus areas are Software for e-commerce and studios, where there are major efficiency improvements to be made and where we have made several innovations in 2023. The third area, Light for film production, is a newer area with great opportunities that we are now investing in.

To succeed in implementing these strategies in North America, our largest and most important growth market, we are now increasing our investment in sales and marketing in the US and are moving the management of the global marketing department to Los Angeles. At the same time, Sara Strid assumes a new role as Vice President North America and Global Marketing based in Hollywood, Los Angeles. The move into super powerful LED lighting for film production requires a new marketing and sales organisation and will now be led from the key market. The next step in this venture will be to launch the first product for film production at CineGear, at Warner Bros studios, Burbank, California.

It is difficult for us to predict when the macroeconomic conditions will improve. I am very proud that the organization has worked purposefully on those things which we do have influence over. I am particularly pleased that our investments in product development are now bearing fruit, with the launch of the Pro-D3 on May 7. I am convinced that the launch, together with our increased presence in the US, will lead to growth!

Sundbyberg, May 14, 2024

Anders Hedebark
President and CEO

For further information, please contact:
Carl Bandhold, CFO
[email protected]
+46 (0) 702 96 76 97
Amanda Åström, Investor Relations
[email protected]
+46 (0) 736 79 34 48

Financial calendar
AGM 2024 – May 14, 2024
Interim Report Q2 2024 – July 17, 2024
Interim Report Q3 2024 – October 24, 2024

Conference call
Profoto Holding AB (publ) will publish its interim report for the first quarter 2024 on Tuesday, May 14 at 8:00 a.m. CEST. At 9:00 a.m. on the same day, a webcast teleconference will be held in which President and CEO Anders Hedebark will present the report together with CFO Carl Bandhold. The presentation will be followed by a Q&A session. The presentation will be held in English. If you wish to participate via the webcast, please use the link below.

If you wish to participate via teleconference, please register via the link below. After registering, you will receive a phone number and a conference ID to log in to the conference. The teleconference provides an opportunity to ask questions in real time.

About Profoto
Profoto was founded more than 50 years ago and has since then been a world leader in lighting equipment for professional photographers, driving innovation and awareness of how to create better images through light. We know that light is the indispensable source in all image creation – whatever the camera or situation. Creating great images is about mastering and shaping light. The end users are professional photographers and commercial customers, including major consumer brands and e-commerce companies. The company currently has sales in 54 countries worldwide. Net sales in 2023 totaled SEK 787m, with an EBIT margin of 26 percent. Profoto has approximately 140 employees at its headquarters in Stockholm and in subsidiaries in the US, Japan, China, Germany, France, England and the Netherlands.