Humble Group: Capacity increases to pay off in H2'24 - ABG

Marginal estimate changes
Gross margin improvements still on the horizon
'24e-'25e lease adj. FCFE yield excl. earn-outs of 8-10%


Takeaways from the report

The Q4 report was surprisingly strong on both organic growth (18% vs. FactSet cons. 9%) and the gross margin (31.7% vs. cons. 29.3%). However, the strong organic growth and gross margin did not carry an incremental improvement on EBITA (2% below cons), which was weighed down by unexpected growth in opex. We do not deem the higher opex level a concern, even if it should be of a more permanent nature because the opex investments made during Q4'23 are aimed at increasing the company's capacity level and marketing its products — both of which bode well for future organic growth. Operating cash flow was strong once again at SEK ~256m (reported operating cash flow less interest expenses), helping deleverage the balance sheet additionally and freeing up capital for M&A.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/humble-group/Equity-research/2024/2/humble-group---capacity-increases-to-pay-off-in-h224/