Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tonies SE (TNIEF, Financial) reported a 21% revenue growth in Q3 2024, reaching EUR95 million, with North America showing exceptional growth of 40%.
- The company has successfully expanded its global footprint, now present in over 100 countries, with 7.8 million Tonieboxes and over 90 million Tonies sold since 2016.
- Tonies SE (TNIEF) has a strong customer engagement, with children spending over 270 minutes per week on their platform and a net promoter score above 70 in the US.
- The company has diversified its supply chain by onboarding new suppliers in Vietnam, reducing regional dependencies and enhancing supply chain resilience.
- Tonies SE (TNIEF) is on track to achieve its full-year 2024 guidance, expecting group revenue of EUR480 million and an adjusted EBITDA margin between 6% and 8%.
Negative Points
- The company's growth in the first nine months was below the guided growth for 2024, raising concerns about meeting year-end targets.
- Tonies SE (TNIEF) faces potential risks from changes in US trade policies, including tariffs, which could impact their supply chain and costs.
- The company has not disclosed specific sourcing percentages, which may lead to uncertainties regarding their supply chain strategy.
- There is a heavy reliance on Q4 for revenue generation, as it typically accounts for 50% of annual revenue, increasing pressure on performance during this period.
- Tonies SE (TNIEF) has not provided specific guidance on segment profitability, particularly for the US market, which may concern investors seeking detailed financial insights.
Q & A Highlights
Q: Are you prepared for another Trump legislation? What percentage of your US product is sourced from China? And what happens if Trump imposes tariffs on your products?
A: We do not disclose specific sourcing percentages, but we are proactively preparing for various scenarios, including potential tariffs. We've onboarded suppliers in Vietnam and have the flexibility to shift production away from China to Southeast Asia, North Africa, and Europe. Our Clever Tonies and Book Tonies are already produced in Europe, and we have multiple sourcing strategies in place to manage trade policy scenarios effectively. β Tobias Wann, CEO
Q: Growth in the first nine months has been below your guided growth for 2024. Could you please let us know what makes you confident for Q4?
A: Our first nine months performed as expected, and we anticipate significant acceleration in Q4, which typically generates 50% of our annual revenue. We have excellent visibility into our wholesale revenue and expanded store presence. The US market is showing strong growth, with an increase in points of sale from 6,700 to 8,300 by year-end. β Tobias Wann, CEO
Q: How do you see the supply chain situation now? Can you comment on your inventory levels?
A: We are well-prepared, having diversified our supply chain and enhanced forecasting capabilities. Our inventory levels are strategically positioned to meet Q4 demand, and we have passed the peak inventory build-up, ensuring we are ready for a successful Q4. β Tobias Wann, CEO and Jan Middelhoff, CFO
Q: You recently expanded to the Australia, New Zealand region. Which region do you see as the next to develop or explore?
A: Our expansion into Australia and New Zealand has been our most successful launch. We continuously evaluate new markets but do not disclose plans until officially announced. β Tobias Wann, CEO
Q: Do you still want to be breakeven in the US in 2024 in terms of margin?
A: We have guided for the company to be profitable on an adjusted EBITDA basis at a group level of 6% to 8% and have not provided specific segment profitability guidance. Our strategy is to replicate the profitable blueprint of the DACH segment internationally. β Jan Middelhoff, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
