DistIT: Solid sales despite negative external factors - ABG

Sales SEK 613m +2.9% vs ABGSC 596m
EBIT -33% y-o-y, -26% vs. ABGSCe
Expect cons to slightly come down for 2022

Q1 results
Q1'22 report: Sales SEK 613m (2.9% vs ABGSC 596m), EBITDA SEK 16m (-10.3% vs ABGSC 18m), EBIT SEK 9m (-26.0% vs ABGSC 12m), Net profit SEK 0m (-92.8% vs ABGSC 6m), EPS SEK 0.01 / share (-97% vs ABGSC 0.35 / share).

Q1 thoughts
The Q1 report was in line with our sales expectations even though DistIT was affected by external factors such as inflation, just like we expected. Despite these headwinds, the company managed to grow sales 12% y-o-y. Septon, with event-exposure, was strong with a 37% growth y-o-y due to increased B2B sales. Also, Efuel’s results was strong with sales of SEK 54.4m (+21% vs ABGSC). Aurora Deltaco’s sales declined 4% y-o-y, where the B2C was negatively affected by the external factors. Own product sales grew by 12% (28% of total sales), which made the GM stay unchanged y-o-y, despite the FX headwinds and high freight rates. The lower EBIT (-33% y-o-y and -26% vs. ABGSC) is explained by higher cost related to the large inventory that the company has, but also due to costs related to the expansion of own brands.

Estimate revisions and valuation
The share is -42% YTD (while OMXS PI is down 19%) and is trading at EV/EBIT of 9x-6x for ‘22e-‘23e on our unrevised estimates, fairly in line with FactSet consensus’ 5Y historical average of 8.5x NTM. Although Q1 is not a large quarter for DistIT, we expect cons to slightly lower estimates.
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/distit/Equity-research/2022/4/distit---solid-sales-despite-negative-external-factors/