Q3 2024 Fractal Gaming Group AB Earnings Call Transcript
Key Points
- Fractal Gaming Group AB (OSTO:FRACTL) launched new product categories, including the Refine gaming chair and Era 2 case, which received strong market reception and positive reviews.
- The company observed a gradual improvement in the market towards the end of Q3 2024, with resellers increasing stock levels ahead of the crucial sales period in Q4.
- Fractal Gaming Group AB's new product categories, such as gaming chairs and headsets, are less reliant on the component upgrade cycle, providing stability in sales.
- The company maintains a strong financial position with SEK30 million in net cash and no use of the overdraft facility, demonstrating financial stability and flexibility.
- Fractal Gaming Group AB expanded its distribution network by partnering with Best Buy in the US, increasing product availability to a broader audience.
- Net sales for Q3 2024 decreased by 17.5% year-over-year, reflecting a challenging market environment and high comparative numbers from Q3 2023.
- EBITDA for the quarter was SEK12 million, down from SEK35 million last year, with a margin decline from 18.5% to 7.4%, primarily due to lower net sales and product margins.
- Product margins decreased to 37.8% from 41.8% last year, driven by increased discount levels in the market and negative FX effects.
- Sales out declined by 16.5% due to reduced consumer purchasing behavior amid high inflation and interest rates, as well as anticipation of new component releases.
- The company faced production challenges with the Refine gaming chair, leading to stock shortages in some markets due to higher-than-expected demand.
Hi, everyone, and welcome to today's presentation of the Q3 report for Fractal Gaming Group.
Today, we will be presenting the key highlights from our just released Q3 quarterly report, focusing both on the headwinds that we have been facing and the positive outlook that we see ahead for our company and industry. We are, of course, happy to answer any questions that you might have either in the end of the call or if you reach out to us individually.
We will start with some general comments from Q3 and the changes in the headwinds that we are facing and the long-term positive outlook that we believe can take us back to growth already by end of year.
Our net sales for the quarter was SEK157 million, representing a decrease of 17.5% in SEK, but 13.9% organically. This development is in line with our expectations following the high comparative numbers that we are facing from Q3 2023, a quarter where we saw a very strong growth of 45% year on year.
We are seeing a gradual improvement in the market compared to the first half of
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