Shelly Group Q3 2024 consolidated results

Shelly Group continues on track to reach annual targets

• Shelly Group continued their strong sales push in Q3 amid overall turbulent environment. Total revenue marked an impressive growth of 46.6% reaching EUR 65.4 mln (BGN 127.8 mln), which was due to the focused sales strategy. That did not include the additional income from selling one of its subsidiary companies for EUR 0.635mln (BGN 1.2mln).
• The sales of IoT products make up more than 98.9% of the revenues, hence the additional revenues, which compromise of sales of services, rents, FX instruments, etc play a marginal role and their movements are largely irrelevant. What is interesting, however, is the account of income from services and rent, which represents mostly subscription fees through their app, has grown from EUR 14 thousand last year to EUR 328 thousand, marking an impressive 2,274% YoY growth. The development of this line of business will be one of the interesting trends about Shelly Group, which will be observed in the next year as it is going to show the acceptance of the customers of their Shelly products and would indicate future performance.
• Analysis of sales cost changes indicate the implementation of a focused marketing based sales strategy. Sales cost have ballooned from EUR 1.7 (BGN 3.3mln) to EUR 6mln (BGN 18.7mln). The real chunk of that – advertising has grown from EUR 1.7mln (BGN 3.3mln) to EUR 7.8mln (BGN 15.2mln). Naturally, this is targeting retail clients. There is also an additional account, which was not present in the past- exhibitions – standing at EUR 0.8mln. As exhibitions are open for all but really sought after corporate representatives, this indicates a more focused B2B approach. Other account movements, for example those for all cash payments and all other unaccountable smaller scale activities, have decreased, which indicate a serious push towards efficiency.
• EBIT increased 29.2% to reach EUR 15.4mln (BGN 30.2mln), which is the result of the increased investments last year in the sales channels, RND processes and efficiency. COGS increased slightly less than Sales revenue (46.8% vs 47.2%), which improved Gross Profit reaching EUR 37.2mln (BGN 72.8mln). Keeping control of Labor costs (increase of 22% to EUR 8.5mln) and External services (a decrease of 8% to EUR 2.5mln) helped improve profitability metrics.
• Considering the increased sales, the “Other expenses” account, which represents a provision for possible future client claims as required by EU regulation for operating on EU markets, increased to EUR 0.6mln. As mentioned before, we notice a very positive shift towards efficiency from the management.
• Net profit of the group increased by over 38.5% to EUR 13.8mln (BGN 26.9mln) but without the one-off profit from the sale of the subsidiary, it would be EUR 13.1 or an increase of 32%.
• Total Assets increased by 30% due to the larger inventory (a 121% rise to EUR 22 mln) and Trade Receivables (58% rise to EUR 27.6 mln). The increase in the Current Assets and the decrease of Current Liabilities lifted the Current ratio to 8.0. The decreased Cash by 37%, however, dropped the Cash ratio further to 1.4.
• The company decreased their loans, which is why their liquidity improved even more from and now cash represents 18x total debt and 22x short term debt.
• On 11.07.2024 the company announced they had acquired 100% of the assets and intellectual property of the troubled Dutch smart lock producer LOQED B.V., currently in bankruptcy proceedings. The deal included access to the production facilities of their main supplier in China, as well as the agreements with all the sub-suppliers, indicating that the whole production process can continue without interruptions. The price of the acquisition was EUR 150,000.
• On 18.07.2024 the company started trading in EUR to comply with the listings on the Frankfurt Stock Exchange.
• On 4.10.2024 the company announced the completion of the sale of its subsidiary “Shelly Properties” EOOD, which main asset was the previous office building hosting the headquarters. The revenues from the sale are EUR 3.5mln (BGN 6.8mln). The company moved the headquarters to a new location with office space better suited for the needs and the expected expansion.
• On 16.12.2024 the company completed the transformation into an European Company (Societas Europaea – SE). Shareholders of Shelly Group AD are shareholders of Shelly Group SE without any effect on ownership size or privileges.
• On 09.01.2025 the company announced unofficial results for 2024 where they announced sales of IoT products of EUR 105mln, i.e. beating annual targets. Official unaudited results will be announced on 24.02.2025.

Full report can be accessed here.