Elanders: A bump-up in the long-term margin profile - Nordea

Encouraged by the acquisition of Kammac, we raise adjusted EBIT by 14-15% for 2024E-25E ahead of Elanders' Q4 2023 report. However, while we remain optimistic about the automotive business in the short term, we still expect the sour cocktail of normalising freight rates and softer demand for its major segments in Q4. Its margin-accretive initiatives, such as the phase-out of its buy-and-sell operations and the exit from parts of the German transportation operations, are set to keep feeding the negative organic growth in the near term. We are highly encouraged by the long-term margin trajectory, however, because we view Elanders as well suited to capitalise on returning demand. Along with strong cash flow in Q4, we pencil in a lease-adjusted net debt/EBITDA of 2.7x for 2024. We raise our multiples-based fair value range to SEK 90-154 (85-141). Marketing material commissioned by Elanders.

Länk till analysen i sin helhet: https://research.nordea.com/api/reportfileapi?id=902466