Dedicare: Demand is holding up well in Q2 - ABG

43% sales growth y-o-y, 37% organic We raise ’23e sales & EBIT estimates by 6% and 10% New fair value range of SEK 89-116 (82-113) Q2: Adj. EBIT of SEK 38.4m (25.6m), 20% above ABGSCe
Dedicare reported Q2 sales of SEK 428m (+43% y-o-y of which 37% organic), 5% above ABGSCe. The deviation stems from the Norwegian operations, which reported sales growth of 54% y-o-y (all organic), 8% above ABGSCe. According to the company, the growth rate is higher than the overall market, meaning that Dedicare has strengthened its already market-leading position in the region. Sweden and Denmark reported sales growth of 36% and 9% y-o-y, respectively. Despite a lower growth rate in Denmark, the company sees increased demand and deployed growth initiatives in H1, increasing its internal employees by 30% to meet future expected demand. This resulted in a lower Q2 EBIT margin for Denmark of 2.2% (4.3%); Sweden and Norway reported 6.3% (2.7%) and 12.5% (13.5%). Group adj. EBIT was SEK 38.4m (25.6m), corresponding to a margin of 9.0% (8.6%) and 20% above ABGSCe.

Norwegian operations drive positive revisions We mainly adjust our Norwegian estimates following the report, as the strong demand has continued for longer than we previously expected. In addition, we also lower our EBIT estimate for Denmark, but this has less of an effect on the overall numbers as it constitutes less than 10% of the total group. In total, we raise our ‘23e sales estimates by 6% and our EBIT estimates by 10%.

Positive news regarding political landscape Dedicare has witnessed two favourable political outcomes of late. First, the final Norwegian law change regarding temporary staff has been presented and it will not affect Dedicare negatively. Second, the national procurement regarding staffing within health care has been delayed, as it was adjudged to have flaws, which was why Dedicare decided to review it in the first place. The whole process will likely be delayed for about a year and the current terms will be prolonged a ... Läs mer på ABG Sundal Collier

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