Elanders: Margins overshadowed by accounting issue - Nordea

On 13 April, Elanders published preliminary Q1 2023 numbers, suggesting a 16% y/y EBITA uplift and margins up 50 bp y/y, with the former on a par with our expectations and the latter some 20 bp ahead. While headline figures were solid, an accounting issue in its US operation was uncovered, leading to a SEK 70m non-cash charge in Q1. This will inevitably cast doubt on the company's internal controls, since a similar incident was discovered in late 2019. Nevertheless, it notably has no cash flow impact, and we believe that the market will instead focus on the impressive y/y margin uptick, despite volumes coming under pressure in the important Supply Chain division. Owing to minor revisions, we lower our multiples-based fair value range slightly to SEK 157-225 (158-226). Marketing material commissioned by Elanders.

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