Christian Berner Tech Trade: Let’s see what Mrs. Reuterskiöld has in mind - ABG

Adj. EBITA 12% above our expectations
Q2’22 should be boosted by heating projects…
…and strong L12m order intake should support H2’22

Order intake the highlight, again
CBTT’s Q1 was slightly better than expected where the highlight was the strong order intake of SEK 215m, up 28% y-o-y, 17.5% organic, primarily due to high activity within the Process & Environment segment. This was the fourth quarter with strong growth in order intake and on a R12m basis order intake is 3% higher than sales. In terms of segments, Process & Environment showed solid sales at SEK 132m, up 20% y-o-y with a margin of 5.4% (4.4%), whereas Materials Technology was softer. Sweden (71% of L12m sales) was the strongest market with growth of 15% and EBITA margins of 7.1% (6.5%), whereas performance in other markets was soft. All in all, sales were SEK 181m (1% above ABGSCe), up 13% y-o-y, 4.5% organic. Adj. EBITA was SEK 8.5m (12% vs ABGSCe), corresponding to an adj. EBITA margin of 4.7% (4.9%) vs. ABGSCe of 4.2%. Lastly, CBTT announced that a payment of SEK 4.1m was made during April in connection with the acquisition of Empekk, which we now have included in our cash flow estimates for Q2 (no effect on IS).

Despite continued headwinds, ’22 looks alright
We leave our estimates relatively intact following a report fairly in-line with expectations in a seasonally small quarter. Looking ahead, management expects to see a continued negative impact from longer lead times and cost inflation and mentions that CBTT may experience some indirect effects from the Russian invasion of Ukraine, if shortages of steel products and energy affect its suppliers. However, the strong order intake during the last 12m bodes well for H2’22. Additionally, in the report management highlighted that CBTT in Q1 has not made final settlements on several major heating projects, which has affected comparisons with Q1’21. Instead, we expect this to occur in Q2, which should boost both sales and earnings, thus de-risking our estimat ...
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