Berner Industrier: Personnel changes weigh on margin - ABG

- EBITA adj. -11% vs. ABGSCe after -1.8m one-off
- Gross profit in line with ABGSCe, but elevated costs hamper EBITA
- One-off related to personnel changes in T&D to drive efficiency

Q2 results
Order intake came in at SEK 249m (-11% vs. ABGSCe 279m), -12% y-o-y. While below our expectations for Q2, management emphasised that it was above average and can fluctuate between quarters. Sales came in at SEK 255m (+3.9% vs. ABGSCe 245m), +3.6% y-o-y (+3.4% org.). EBITA was SEK 15m (-21% vs. ABGSCe 19m), for a margin of +6.0% (ABGSCe +7.9%). While gross profit was in line with our expectations, EBITA was hampered by elevated costs related to personnel changes, as two subsidiaries in the Technology & Distribution segment received new managers; we have adjusted for the explicit SEK 1.8m mentioned in the report. EBITA adj. was SEK 17m (-11% vs. ABGSCe 19m), for a margin of +6.8% (ABGSCe +7.9%). EPS adj. came in at SEK 0.62 (-16% vs. ABGSCe 0.73), -9.0% y-o-y. FCF lease adj. came in at SEK -5.2m (+16% vs. ABGSCe -4.4m), -4.2% y-o-y.

Estimates and outlook
On numbers alone, '24e-'26e sales change by +1.0%, and EBITA adj. changes by -2.9%. Management is continuing its work to improve the efficiency of the group, which hampered the Q2 margin, but should prove good for the long term. The company is seeing significantly greater activity in the M&A markets, and states it always has several ongoing dialogues, but emphasises that these can take time before bearing fruit.

Valuation
The share has returned +42% L3M (vs. peer median +17% and OMXSSMAC +12%), and is currently trading at 17x-14x '24e-'26e P/E on our pre-report estimates vs. the peer median of 25x-10x.

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