Boule Diagnostics: Strong sales but weaker margin - ABG

Q2 Sales 3% above but EBIT 66% below Components the issue in Q2, price hikes implemented Cons ‘22e EBIT to come down ~20%, less for ‘23e Q2 figures

Net sales SEK 141m (3% vs ABGSCe 137m), EBIT SEK 5m (-66% vs ABGSCe 15m), EBIT margin 3.6% (-7.6pp vs ABGSCe 10.6%), Net profit SEK 3m (-70% vs ABGSC 10m). Organic growth in line with ABGSCe, hence sales beat was mainly FX driven. Access to components caused weaker gross margin at 37.8% (ABGSCe 44.0%) and somewhat fewer instrument deliveries than we expected. Cost for IVDR certification also holding back EBIT. Looking at the regions, we note that sales to Eastern Europe has held up fairly well despite the war in Ukraine, while APAC is on the weaker side.

Outlook and estimates Management has given guidance on the new product platform, where it expects revenues first revenues in late 2024, with some geographies having to wait until early in 2025 in. It expects the tougher component situation to withstand in H2. It has implemented further price hikes in Q2, which it expects to have gradual effect in H2, and it expect gross margins to normalize as the supply chain does. The weaker EBIT in Q2 mechanically lowers cons '22e EBIT by 13%. With the weaker margin in Q2, we would expect cons to lower their margin expectation for H2, and we could negative revisions closer to 20%, but materially less impact on '23e as gross margin normalize.

Final thoughts The share has traded in line with the market over the past month. It trades at an EV/EBIT ’22-‘23e of 10.1-8.5x on our unrevised estimates. There is digital presentation at 10.00 CET. Link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_MDA1OGE4NDAtNTJjMy00YjA3LTkxZmUtNTA0NWJlNThlM2U2%40thread.v2/0?context=%7b%22Tid%22%3a%2282b18cad-14b9-4dde-93bf-de13cf557ee6%22%2c%22Oid%22%3a%22ac39c883-8aa8-47fb-b599-b79bea585332%22%7d

Läs mer på ABG Sundal Collier

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