Careium: Slow growth but cash flow relief - ABG

Q4 sales lower than expected, mainly on delayed product sales
Strong CF driven by WC improvements
Share is trading at 8.4x '24e EV/EBITA on our pre-Q4 ests.


Q4: Soft sales growth, but increased margins

Careium delivered sales of SEK 199m (-12% vs ABGSCe 227m), -8.2% q-o-q and +0.4% y-o-y organically ex. FX (ABGSCe +13%), partly driven by leaving less profitable contracts and delayed UK product sales. This entails a FY'23 sales growth of 13.7%, from SEK 725m '22 to 825m (-3% vs ABGSCe 852m). Segment wise, service sales was SEK 154m (-8% vs ABGSCe 168m), and product sales was SEK 45m (-23% vs ABGSCe SEK 59m). EBIT reached SEK 16.7m (-5% vs. ABGSCe 17.5m), for a margin of 8.4% (ABGSCe 7.7%, 9.5% in Q3’23), driven by a decrease in opex of 6% y-o-y and -14% q-o-q. GM declined to 40.2% (-1.5pp vs ABGSCe, -3.3pp q-o-q and +0.8pp y-o-y), partly due to higher sick-leave. Opex came in slightly better than expected at SEK -63.5m (-18% vs. ABGSCe -77m), on an admin cost decrease of -29% q-o-q, and -19% y-o-y.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2024/2/careium---slow-growth-but-cash-flow-relief-/