Inission: Exceeding expectations - ABG

26.5% organic sales growth, EBITA margin reaches 7.9% (4.8%)
Demand remains strong, investing in increased capacity
11x '23e EV/EBITA, 15x '23e P/E, fair value SEK 55-75


Q1: an impressive quarter

Inission delivered a very strong Q1, with sales of SEK 565m, growing 26.5% organically. There were fewer materials sales in Q1 than Q4, and revenue growth was instead mainly driven by most factories operating near capacity. This was also the primary driver for the improvement in the EBITA margin, which reached 7.9% (Inission 8.9%, Enedo 4.6%) compared to 4.7% in Q4. FCF was only SEK 0m (0m) due to a build-up in receivables and inventory, but given the high growth, some WC build-up is to be expected. Management states that the company is investing in new machinery and personnel in order to increase capacity and meet the continuing strong demand. Component shortages remain, but are steadily decreasing.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/inission/Equity-research/2023/5/inission---exceeding-expectations/