Hanza: Impressive growth in difficult market - ABG

EBITA SEK 41m (in line with FactSet cons. 41m)
Organic growth of 26% (ABGSCe 12%)
11x ’22e EV/EBITA on pre-Q1 numbers

Q1 outcome
Sales were SEK 824m (+18% vs. ABGSSCe 700m, +16% vs. FactSet cons. 708m), up 45% y-o-y, of which 26% organic (ABGSCe 12%). EBITA was SEK 41m (+6% vs. ABGSCe 39m, 0% vs. cons. 41m), for a margin of 5.0% (ABGSCe 5.6%, cons. 5.8%), with no NRIs. Main Markets outperformed our expectations (EBITA SEK 38m, +24% vs. ABGSCe 30m), however profitability in Other Markets continues to be hurt by the current expansion program (EBITA SEK 5m, ABGSCe 10m) that leads to higher costs. All in all, the organic growth of 26% indicates strong demand, but margins were somewhat pressured by production disruptions tied to the pandemic as well as the acquisition of Beyers, which is not yet profitable and dilutes margins.

Estimate changes and outlook
We expect positive consensus revisions of 3-4% for ’22e-’24e EBITA. Although Q1 EBITA was in line with consensus expectations, HANZA says that it has a record order book in Germany as demand returns after the pandemic. Also, the company reiterates that the expansion program in Other Markets will be completed in time, in H1’22.

Final thoughts and conference call details
On our pre-Q1 numbers, the share is trading at 11x ’22e EV/EBITA with an estimated adj. EBITA CAGR of 14% for ’21-’24e. The company will host a conference call at 11:00 CET, dial-in SE: +46850558353, UK: +443333009030. The presentation can also be viewed via livestream at https://tv.streamfabriken.com/hanza-q1-2022.
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/hanza/Equity-research/2022/5/hanza---impressive-growth-in-difficult-market/