Miraculum reported its 3Q23 results with EBITDA of PLN 715k and net profit PLN of PLN 159k (both above our expectations) driven by improvement of gross margin by 4.0pp y/y and operating costs maintained under control. Below please find key highlights:
• Revenues came in at PLN 10.8m (-4% y/y), in line with monthly data including PLN 3.2m in July (-6% y/y), PLN 3.6m in August (+7% y/y) and PLN 3.9m in September (-9% y/y). Miraculum reported a 25% y/y increase in sales of perfumes to PLN 3.2m (supported by Chopin brand), while shaving and makeup cosmetics deteriorated by 6% y/y and 20% y/y, respectively. The company informed that export sales declined by 23% y/y to PLN 3.1m and accounted for 29% of total sales (impact of high base in 3Q22 driven by contracts to Saudi Arabia).
• Gross profit reached PLN 4.2m (+7% y/y), implying gross margin of 39.3% (+4.0pp y/y). The improvement was mainly related to sales-mix and higher share of high margin Perfumes segment (margin of 45%).
• EBITDA came in at PLN 0.7m (+25% y/y), resulting in EBITDA margin of 6.6% (vs. 5.1% in 3Q22). SG&A costs increased by 2% y/y to PLN 3.8m at that time.
• Net profit amounted to PLN 159k (vs. our forecast PLN 20k) with net financial costs of PLN 35k.
• Operating cash flow amounted to PLN -566k (vs. PLN -501k in 3Q22). The company had inventory of PLN 13.1m as of end-3Q23 (-4% y/y), resulting in reduction of inventory cycle from 171 days in 3Q22 to 155 days in 3Q23. Miraculum had net debt of PLN 19.0m as of end-3Q23 (-10% y/y).
Positive, as reported results were above our expectations on improved y/y gross margin (driven by high-margin perfumes segment) and SG&A costs kept under control (4% below our estimates). Additionally, the company has managed to y/y reduce its inventory and net debt levels. We point that 9M23 EBITDA reached PLN 1.5m (vs. PLN 0.9m in 9M22), that is already above our FY23E forecast of PLN 1.4m. Finally, we note that the company reported solid revenues of PLN 5.0m in October (+8% y/y, slightly above our assumptions)