Bergs Timber: New segment boosts estimates - ABG

• Q2'23 report on Tuesday, 25 July
• Adding new Furniture & Components segment to estimates...
• ...results in SEK 183m in '23e EBITDA

Q2'23 expectations
We expect group sales of SEK 753m, down 25% y-o-y. We forecast sales of SEK 252m (403m) for Sawn Wood, and for Wood Solutions we expect sales of SEK 273m (420m), which should be supported by a positive seasonal effect. For Doors & Windows we forecast growth of 25% y-o-y, resulting in sales of SEK 195m. Moreover, we expect Energy & Logistics to contribute SEK 33m to sales. We forecast group EBITDA of SEK 22m (173m) and clean EBIT of SEK 0m (151m). Finally, we expect a net profit of SEK -1m (153m).

Estimate changes
In late June, Bergs acquired Hedlunda, a manufacturer of wooden furniture and components. This will add a new segment to the company, Furniture & Components. By adding this to our forecast, we raise our '23e-'25e EBIT by 31-37% and we now foresee an EBITDA margin of 5.7% in '23e. We are positive on this acquisition and see it as a step in line with Bergs' strategy to focus more on value-adding products. We also continue to expect strong 25% growth in '23e for the Doors & Windows segment. In Q1, the company had an order backlog of 4-6 months, which should support Doors & Windows sales in '23e. Moreover, we continue to expect soft numbers for Wood Solutions and Sawn Wood in '23e due to uncertain demand.

The share is trading at 5x P/E on '24e
The company reports it Q2 report on Tuesday, 25 July. The share is currently trading at ~17x P/E and ~6.1x EV/EBITDA on 2023e, ~5x P/E and ~2.4x EV/EBITDA on 2024e and ~4x P/E and ~1.5x EV/EBITDA on 2025e

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/294a16855ae44497986438e7b88afdaa/pdf/new-segment-boosts-estimates-.pdf