G5 Entertainment: We see growth improving in Q4 - ABG

Q4 report due 09 Feb
EBIT cut by 3%, 6%, and 4% for '22e-'24e
Trading at 9x P/E with 9% FCF yield 2023e


Hidden City stabilisation should support growth

We forecast Q4'22 sales of SEK 364m for y-o-y growth of 12% (-6% organic measured in USD and 18% from FX). The -6% growth is an improvement over -10% in Q3 and -13% in Q2, driven by Sherlock still growing incrementally q-o-q, while we also expect Hidden City to stabilise. The -6% growth in USD is significantly better than the market growth of around -10%. In local currencies, we think the organic growth is slightly positive y-o-y, which we consider strong. UAC should be back at normal levels (20% of sales) while opex is still negatively impacted by the strong Roble. Consequently, we forecast SEK 47m in adj. EBIT for a margin of 13% in Q4 (guidance was 13-14%).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/g5-entertainment/Equity-research/2023/1/g5-entertainment---we-see-growth-improving-in-q4/