Generic: Impressive profitability in Q2 - ABG

Solid sales growth at 10.4% y-o-y, all organic
EBIT growth of 28% with excellent cost control
Demand is holding up well into H2


Q2: Sales growth of 10.4%, EBIT margin of 20% (17.2%)

Generic reported a solid quarter with net sales of SEK 34.6m (+10.4% y-o-y), all organic. We were expecting slightly higher sales growth, as Q2 last year was a bit weaker and reported sales were 3% below ABGSCe. We are not that worried long-term, however, as we see the company as well-positioned to continue benefitting from increased digital communication flows and think that the current economic environment could lead to slightly longer lead times from existing clients to start new projects. More impressively, EBIT was SEK 6.9m (5.4m), corresponding to EBIT growth y-o-y of 28%; despite the sales miss, this was 1% above ABGSCon a y-o-y decrease in other opex. Free cash was SEK 11.3m (2.2m) and total cash flow was only down SEK 4m despite a dividend payout of SEK 15.4m to its shareholders.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/generic/Equity-research/2023/8/generic---impressive-profitability-in-q2/