Elanders: Bright spots appearing - Nordea

We make minor changes to adjusted EBITA for 2024E-26E ahead of Q2. While we expect most of the headwinds from Q1 to persist in Q2, we note the somewhat more optimistic commentary about demand improving for Electronics, while Elanders is facing easier comps. In the longer term, we are optimistic about the recent strategic initiatives, whereby Elanders is phasing out and exiting low-margin businesses. Considering the recent margin-accretive acquisitions of Bishopsgate and KAMMAC, as well as the ramp-up of larger customers in Fashion, we expect the positive margin trajectory to continue. Despite somewhat elevated leverage, for which we pencil in lease-adjusted net debt/EBITDA of 3.4x for 2024, we view Elanders as a more robust and diversified company today, one which we argue is set to better capitalise on rebounding demand. We therefore keep our multiples-based fair value range of SEK 83-142. Marketing material commissioned by Elanders.

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