Alcadon: FTTH deceleration fears, but we expect solid Q1 - ABG

Q1 report due on Friday, 28 April
We expect the strong UK trend to continue despite fibre fears...
...but there are signs of a potential deceleration in FTTH ahead


Some market uncertainties, but we expect a solid Q1

We expect Alcadon to report Q1 sales of SEK 392m, up 91% y-o-y (11% org, 78% M&A, 2% FX). Recently, we have seen media focus on the UK fibre-to-the-home (FTTH) market and issues to secure financing for projects, but we stress that FTTH is a minority of Alcadon's UK sales and its recent growth in the UK has been driven by data centres, and as such we remain positive on the UK going into Q1. However, in its Q4 report Alcadon mentioned decelerating activity among two major Danish customers (where its exposure is almost entirely FTTH). In Q4 we also saw gross margins once again reach historical levels excluding the dilutive effect of the Networks Centre (NWC) acquisition, and we have assumed similar margins for Q1e, leading to an estimated EBITA of SEK 29m at a margin of 7.4%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/alcadon/Equity-research/2023/4/alcadon---ftth-deceleration-fears-but-we-expect-solid-q1/