Expected results: The consolidation (from mid-2Q24) of the acquired Sellier & Bellot will help Colt in 4Q24. This is the main reason why results will be higher than last year. Seasonality towards the end of the year is also positive. We expect Colt to achieve EBITDA growth of +58% yoy to CZK1.8bn. Colt CZ will meet its revenue targets and slightly exceed EBITDA.

Announcement date: Thursday, March 27, 2025, before the market

Expected results: The consolidation (from mid-2Q24) of the acquired Sellier & Bellot will help Colt in 4Q24. This is the main reason why results will be higher than last year. Seasonality towards the end of the year is also positive. We expect Colt to achieve EBITDA growth of +58% yoy to CZK1.8bn. Colt CZ will meet its revenue targets and slightly exceed EBITDA.

The U.S. commercial market is critical for firearms sales, which account for about two-thirds of total sales. In January, total U.S. firearms sales increased, while in February they decreased. Cumulatively, however, there has been a slight increase since the beginning of the year. This is further supported by ammunition sales, which account for about one-third of total sales. We expect the USA to continue to generate more than 40% of total sales in 4Q24. The Czech Republic and the rest of Europe will be the next most important markets. Meanwhile, in Europe (excluding the Czech Republic), ammunition sales are a key indicator, accounting for 60% of total revenues in 9M24. Weapons sales to the civilian market and to the military (M&LE) are expected to be roughly equal. In the last quarter of last year, total revenues should reach CZK6.7bn, up +36% yoy. Despite higher costs related to the consolidation of S&B, the EBITDA margin should increase by 3.6pps to 26. 1%. EBITDA will reach CZK1.8bn (+58% yoy). We expect higher depreciation and amortization, which will be negatively impacted by the purchase price allocation (PPA) of the S&B acquisition. This will have a negative impact on net income. We also expect higher financial expenses. We estimate net income at CZK548m. This is slightly below the (-3.5% yoy) result in the same period last year.

Full year 2024: Colt will meet its projections. For the full year, we expect revenue growth of +46% to CZK21.7bn. This is towards the upper end of management's revenue target range of CZK20-22bn.  We expect EBITDA to reach CZK4.8bn (+57% yoy). With this result, the company would slightly exceed its target of CZK4.3-4.7bn.

Dividend: We expect Colt to pay a dividend of CZK32.2 to shareholders for last year. This represents a payout ratio of 70% and a gross yield of +4.2%.

Forecasts to 2025: According to our model, Colt CZ should achieve total revenues of CZK25.2bn this year (2025), which would correspond to +16.3% yoy growth. We expect EBITDA to grow +17.1% yoy to CZK5.6bn. The better result is largely due to the full-year consolidation of Sellier & Bellot (from May 16, 2024).