C-RAD: Exceptional orders, but at what cost? - ABG

Order intake up 49% organically, but EBIT 29% below ABGSCe
Less able to scale as costs increase; we cut '24e EBIT by 21%
Trading 37% below peers. Fair value range SEK 40-89 (45-95)


Impressive order intake, but excitement held back by costs

Order intake was exceptional, surpassing our estimate by 56%. It was largely driven by the SEK 46m Italy order won in early December (not in our estimates). Even when excluding this large order, it would have been 23% better than ABGSCe. Nevertheless, the 49% organic order growth is showcasing impressive traction in a soft macro environment. Sales was slightly better (+3% vs. ABGSCe), also driven by EMEA. Despite solid gross margins, adj. EBIT missed ABGSCe by 29% as opex continues to increase rapidly. This is mainly a result of personnel expenses that increased by 50% organically y-o-y. The headcount has increased by 21% y-o-y with an incremental annual run-rate cost increase of SEK 4m per added employee based on Q4.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/c-rad/Equity-research/2023/1/c-rad---exceptional-orders-but-at-what-cost/