Berner Industrier - Calm Q2e, M&A opportunities in H2 - ABG

Q2e: limited developments
In Q2, we expect SEK 279m in order intake, down 2% y-o-y, and sales of SEK 245m, in line with last year's figure. For adj. EBITA, we have SEK 19.4m (19.0m), implying a y-o-y margin expansion of 0.2pp from 7.7% to 7.9%, driven by operational improvements. Overall, we are somewhat cautious after the weaker order intake in the past two quarters, but do not over-extrapolate this, as order intake can be volatile. We expect EPS of SEK 0.71 (0.60), and lease adj. FCF of SEK -4.4m (-5.4m).

M&A market to turn more active in H2
We make only very minor estimate changes driven by updated FX forecasts. The outlook for the company remains largely unchanged, and we maintain our positive view on the operational development of Berner Industrier (recently renamed from Christian Berner Tech Trade). Going into H2, we hope to see the company make a return to M&A, something which management has previously hinted at. Several companies we cover have indicated that sellers' price expectations have come down in recent months, which should enable a more active M&A market in H2.

P/E 14-12x with M&A potential
The share is up 22% L3M (vs. peers +5%, and OMXSSMAC +7%) and is currently trading at a '24e-'26e EV/EBIT of 12-10x and a P/E of 15-12x vs. the peer medians of 17-12x and 24-9x, respectively. We raise our fair value range to SEK 40-55 (35-45), as we turn more positive on near-term M&A.

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