Alcadon: We expect a solid quarter despite soft FTTH - ABG

Q4 report due on Friday 23 February
'24e-'25e EBITA down 2-1%, UK raised but Germany lowered
Share +32% L90D, but still trading below its 5Y average


Q4 expectations

We expect Alcadon to report Q4 sales of SEK 409m, up 2% (-1% organic, +3% FX). We expect to see demand continue to be mixed, with data centre sales being stronger while fibre-to-the-home (FTTH) remains soft. We note that if there is price pressure on certain FTTH-related products, Alcadon as a distributor should not be significantly impacted, and we expect a slight sequential gross margin improvement to 24.0% (from 23.8% in Q3). With opex similar to Q3, excluding the positive FX revaluation on earn-outs of SEK +5m, this results in an estimated EBITA of SEK 26.4m, -11% y-o-y, for a margin of 6.5% (7.4% in Q4'22, 6.0% in Q3'23). In Q3, Alcadon managed a major working capital release that notably decreased leverage, yet it still remains above 2021 levels, and with Q4 being a seasonally better quarter for cash flow we expect there could be room to release more.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/alcadon/Equity-research/2024/2/alcadon---we-expect-a-solid-quarter-despite-soft-ftth/