Well, the earlier guidance was something like “no growth” or similar. And, my own most extreme bearish scenario would have been a return to 2019 levels, but I would have expected profitability to have been maintained at a corresponding level, adjusted for listing expenses.
Hannes Wallin, CEO and Founder of Fractal comments:
”The lower net sales in the quarter is primarily due to the tougher comparative figures, with growth
in the second quarter of 2020 exceeding 100%, but also impacted by factors related to the shortage
of graphic cards and delayed shipments due to outbreak of COVID-19 in southern China.In July and August, market demand was much weaker than anticipated, affected by the continued shortage of graphic cards that is impacting the whole market for enthusiast computers. The shortage is expected to continue to impact Fractal’s sales and earnings during the second half of 2021 while product margins are affected in the short-term by exceptionally high freight prices.
Our previous view of the full-year 2021 was for lower or zero growth compared with 2020 given that
the base from 2020 was so high, with growth of 58%. In view of the weaker start to the third quarter,
we estimate that net sales for the full-year 2021 will decrease by 15–20% organically.Profitability during the second half of 2021 is expected to be weak since most of our operational costs are fixed costs in the short term in combination with a temporarily weakened product margin”.
Our development is currently impeded by a number of external factors in the wake of the pandemic,
which is also the case for the industry as a whole.
So, this went straight through the floor regarding expectations, and at the same time, a negative profit warning was issued for H2 as a whole. It’s hard to find strong enough words to describe how bad this result is. I haven’t seen such a bad negative surprise in a while, and it came relatively out of the blue. Although it’s stated that this is industry-specific, I find it hard to believe at this point.
Computers in the EMEA region otherwise seem to have performed positively.
