Boreo: A solid Q4 with improving cash flows - Nordea

Boreo reported Q4 adjusted EBIT ex-PPA of EUR 2.5m, 10% above our estimate (no consensus). Net sales of EUR 45m grew 15% y/y in comparable terms (-5% on organic basis) and came 3% below our estimate. Reported EBIT was EUR 1.7m and included EUR 0.3m of items affecting comparability due to writedown in Heavy Machines. Net sales and adjusted EBIT ex-PPA increased in Electronics and Technical Trade, and declined in Heavy Machines. Companies acquired in 2022 had 14% adjusted EBIT ex-PPA margin in Q4, we calculate. Operational cash flow was EUR 3.7m in Q4 (EUR 0.6m a year ago), supported by EUR 1m lower working capital from inventories. EPS of EUR 0.16 came below Refinitiv consensus expectation of EUR 0.19. Dividend proposal stands at EUR 0.44 in line with consensus and our expectations. EUR 0.22 of the dividend is proposed to be paid at a later stage during 2023. In line with its guidance policy, the company does not provide short-term financial guidance. Based on management comments on business areas, outlook appears to be stable to slightly positive going forward. We expect consensus to make only limited estimate revisions based on the Q4 report.

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