Ecoclime: Promising signs for the Evertherm rollout - ABG

Solid growth, especially in Circular Energy
Some necessary growing pains lead to higher opex
10x ‘23e EV/EBITDA (adj.), reiterate fair value SEK 12-20

173% organic growth in Circular Energy, but higher costs
Ecoclime reported Q1 net sales of SEK 54.4m (0% vs. ABGSCe of SEK 54.6m), up 79% y-o-y of which 27% organic (ABGSCe 30%). In particular, we highlight the Circular Energy segment, which grew 173% organically to SEK 13.9m sales (ABGSCe was SEK 10.2m), as this is the segment that we argue will be the main driver of earnings growth in the coming years. Adj. EBITDA amounted to SEK 2.0m (ABGSCe SEK 7.8m), for a margin of 4% (ABGSCe 14%, 0% in Q1’21), and EBIT was SEK -7.6m (ABGSCe SEK 4.0m). The deviation stems from the company expanding its organisation, with focus on the sales unit, and therefore increasing the opex base more than we had expected.
Sales relatively unchanged, opex raised
Sales were in line with our expectations and as such we make no major revisions on sales. As mentioned though, opex took a step up from prior levels, and should remain so for the future as well, although the new management team says it is working towards more stringent cost control ahead. However, since it seems the organisation is being expanded more than we thought in ’22e, we see less of a y-o-y increase in ’23e. All in all, we add additional costs of SEK 15m in ’22e and for ’23e-’24e we only make minor adjustments.
All eyes on the Evertherm rollout
The sales beat in Circular Energy is, in our view, the key take-away from the Q1 report. While we note that the company is having to increase costs to facilitate this growth, we see it as necessary, as a broader rollout of Evertherm in the near-term will be crucial for securing larger bulk orders in the future. Our current estimates are for 26, 49 and 63 Evertherm system deliveries (á SEK 2.5m) in ’22e, ’23e and ’24e, significantly below the planned production capacity of 50 systems in ’22e and 450 by year-end ’23e. If the company builds up mo ...
Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ecoclime/Equity-research/2022/5/ecoclime---promising-signs-for-the-evertherm-rollout/