Cloetta AB (publ)

Reported net sales grew 0.4% in Q2 and 2% year to date, mainly due to a stronger Swedish krona; on a volume-driven organic basis, sales grew 0.8% in Q2 and 3.8% year to date. Branded packaged organic growth was 3.3% in Q2 and 3.4% year to date, while Pick & Mix was up 4.7% year to date. Adjusted operating profit margin was 14.9% in Q2 and 13.9% year to date; management said adjusted gross margin is up year to date on a like-for-like basis. Free cash flow was SEK 86 million in Q2 and SEK 230 million year to date, and net debt was SEK 1.2 billion with net debt/EBITDA at 0.8x. For the second half, management flagged higher A&P, organizational costs tied to geographic expansion, and one-time strategic spending, while reiterating the midterm 12% EBIT target for 2027 and the long-term 14% EBIT target.

Katarina Tell framed the quarter as validation of Cloetta’s strategy, saying Superbrands performed well and profitability was exceptionally strong. She emphasized focus on the five core markets, expansion in the U.K., Germany, and North America, and a stronger operating model built around Net Revenue Management, a fit-for-purpose supply chain, and a more effective organization. She also said M&A is an accelerator, not a requirement, and reiterated that the company is prioritizing disciplined capital allocation and profitable growth over chasing volume.

Frans Rydén highlighted that Q2 organic growth was 0.8% and H1 organic growth was 3.8%, with reported sales growth held back by currency translation. He pointed to adjusted operating profit margin of 14.9% in Q2 and 13.9% year to date, saying the strength came from favorable mix, strong operational efficiency, and some timing-related benefits, while warning not to extrapolate the quarter into H2 because investment spending will step up. He also noted SEK 86 million in Q2 free cash flow, SEK 230 million year to date, CapEx of SEK 40 million in the quarter, leverage at 0.8x net debt/EBITDA, and dividend outflow of SEK 401 million, or SEK 140 per share, up 27% year over year.

Analysts pressed management on how much margins could step down in the second half, and Frans said the best indication is that Q2 should not be annualized because marketing, indirect, and geographic-expansion costs will rise, but he stopped short of giving a precise range. Questions on Germany and the U.S. focused on rollout pace and scope: management said the German Pick & Mix pilot is now in five stores and is rolling out as performance allows, while the U.S. branded rollout will be a limited set of SKUs and not a meaningful driver of this year’s growth. They also clarified that the U.S. branded products are currently served from Cloetta’s own production network.