Empir: Q2 burdened by write-downs - ABG

A tough quarter for both Solve and Apply
Negative revisions to our forecasts
The company still has a healthy balance sheet

Empir reported Q2 numbers that were below our expectations. Net sales of SEK 36.4m was 10% below ABGSCe and adj. EBIT of SEK -5.0m was worse than our forecast of SEK -0.7m. The deviation on adj. EBIT was mainly caused by Empir Solve, which had a negative contribution of SEK 0.4m (3.5m), corresponding to an adj. EBIT margin of -1.1% (10.6%). Empir Apply was also below our expectation with a negative adj. EBIT of SEK 1.8m (0.6m). Empir had a negative free cash flow in the quarter of SEK 2.0m and ended Q2 with cash or cash equivalents of SEK 47.7m (35.3m).

However, Empir once again declared its ambition to seek smaller acquisitions that will complement the current businesses within Solve and Apply as well as looking for a larger acquisition to become a third leg in the group. With a cash position of almost SEK 50m we think the possibility to make acquisitions looks solid and will be vital in order to spread the group overhead costs over a larger business volume and therefore decrease the pressure it currently has on the group’s profitability.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/empir-group/Equity-research/2021/8/empir-group---q2-burdened-by-write-downs/