Inission: Q1 to hold up despite EMS weakness - ABG

M&A to drive growth while organically flat, EBITA margin to hold up
H1 weakness in EMS industry, but companies remain positive on H2
Underlying trends such as electrification remain favourable, 8x P/E


Q1e: growth through M&A, expect margin to hold up

For Q1 we expect sales of SEK 594m, growing 5% y-o-y thanks to the acquisition of AXXE, while the organic development at group level is flat. At the segment level, we estimate Inission will grow 4% organically, while Enedo shrinks 10%. We think the company will maintain its EBITA margin at 7.9%, thanks to an improved gross margin offsetting somewhat higher opex, resulting in EBITA of SEK 47m (45m). This would then convert into EPS of SEK 1.35 (1.43). We expect poor lease adj. FCF of SEK -39m (0m), held back by the repayment of the remaining SEK 82m COVID-related tax respite.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/inission/Equity-research/2024/5/inission---q1-to-hold-up-despite-ems-weakness/