Christian Berner: High order intake bodes well for H2’21 - ABG

Q2 results: sales in line but margins lower than expected
Sales were in line with our estimates at SEK 187m (2% vs ABGSCe 183m), up 13% y-o-y. The sales growth was driven by acquisitions as organic growth and profits were negatively affected by weak order intake during the second half of 2020 and the first months of 2021. Meanwhile, EBITA was SEK 8m (-31% vs ABGSCe 12m), corresponding to an EBITA margin of 4% (8%) vs. ABGSC 6%. Profits were affected by three factors: 1) fewer incoming orders during the second half of 2020 and the first quarter of 2021, due to the pandemic 2) a shift in profit calculations for heating projects, as Covid-19 has hindered on-site work, and 3) extended delivery times, especially for larger projects, due to the reduced availability of raw materials and components. Additionally, CBTT had an acquisition cost of SEK 1.8m in Q2. Thereby, adj. EBIT was SEK 10m (14m) for a margin of 5% (8%).

Estimate changes and outlook
We expect to decrease EBITA estimates by 3-2% for ‘21e-‘23e on isolated numbers. However, CBTT has seen a sharp increase in order intake (49% y-o-y and 28% y-o-y organically) in Q2 with a favourable product mix, providing good conditions for recovery during the second half of 2021.

Final thoughts
The share is up 1% last 3m and is currently trading at 12x ‘22e EV/EBITA while offering a ‘22e-‘23e lease adj. FCF yield of 8-10% on our pre-report estimates.

Länk till analysen i sin helhet: https://www.introduce.se/bolag-inaktiva/christian-berner-tech-trade/Equity-research/2021/8/christian-berner-tech-trade---high-order-intake-bodes-well-for-h221/