Embellence Group: Another reason for premium strategy - ABG

Sales -7% vs ABGSCe, adj. EBITA -7% vs ABGSCe
Outlook uncertain, '23e-'24e adj. EBITA down 4-5%
Share trading at '23e-'24e EV/EBITA of 6-5x


Q4 report in brief

Q4'22 sales were SEK 177m (-7% vs ABGSCe of SEK 190m) following continued soft demand especially in the Nordic segment. Demand in Europe held up well due to the premium positioning and RoW was supported by the Artscape acquisition in Q1'22. The gross profit in Q4 was SEK 106m, resulting in a strong gross margin of 60% (+2.8pp vs ABGSCe of 57%, +3.8pp y-o-y) driven by a higher share of premium sales. The opex ratio was impacted by the lower top-line momentum, resulting in an adj. EBITA of SEK 22m (-7% vs ABGSCe of SEK 24m, -28% y-o-y) for a 12.4% margin (-5pp y-o-y). A cost-savings initiative expected to save SEK 9m p.a. was initiated, with full effect from Q1 '23e. A dividend in line with last year of SEK 0.8 was proposed by the board, corresponding to ~30% of '22 net profits.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/embellence-group/Equity-research/2023/2/embellence-group---another-reason-for-premium-strategy/