Christian Berner Tech Trade: Gradual improvements from Q4 low - ABG

Orders recover from Q4 low, NWC release supports fantastic FCF
Some one-offs weigh on profitability, expect margins to improve
Management seems upbeat on M&A market, acquisitions in '24 likely


Q1: y-o-y improvements limited by one-offs

Q1 order intake was SEK 222m, down 6.5% y-o-y, which marked a sequential improvement as Q4 orders of SEK 212m were down 18% y-o-y. Sales were SEK 243m, up 2% y-o-y, and adj. EBITA was 15.7m (14.8m), for a margin of 6.5% (6.2%). We have adjusted for a SEK 1.2m non-recurring expense related to the outsourcing of certain support functions. Furthermore, profitability was hindered by a lower gross margin, while strikes among Finnish customers delayed some activity for the company. The lower gross margin was due to sales mix and certain large project deliveries with lower margins and should likely not be extrapolated forward. This converted into adj. EPS of SEK 0.57 (0.51), growing 11% y-o-y, and a significant NWC release resulted in very strong lease adj. FCF of SEK 43m (6m), corresponding to ~400% of adj. net income in the quarter.

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