Inission Q4: An exercise in accounting - ABG

41% org. growth and 4.7% EBITA, but some adjustments are due
We increase ests. following strong quarter and transition to IFRS
Trading at 16x '23e P/E, in line with peers, FV SEK 50-70 (45-60)


Strong performance and transition to IFRS

Inission finished off 2022 with a quarter of very strong growth (41% organic), netting sales of SEK 589m with an EBITA margin of 4.7%. Adjusting for unusually high material sales (SEK 60m vs. average ~22.5m) gives SEK 552m and a margin of 5.0%, for 28% organic growth, which is still very strong as the company managed to maintain its growth rate while facing tougher comps. Enedo delivered an EBITA margin of 1.3%, but management stated that this number would have been 3.6% if adjusted for one-offs. During the quarter Inission transitioned to IFRS accounting, with retroactive effect from Q1'21, which affected reported numbers significantly. The main effects include Enedo being consolidated from Q2'21 instead of Q3'22, goodwill no longer being amortised, and leasing being accounted for using right-of-use assets. We judge this to affect EBITA only slightly positively, but affect EBITDA and net income highly positively, as leasing expenses are moved from SG&A to D and financials, while A is almost eliminated. Management highlights that the transition to IFRS enables a potential change in listing in the future.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/inission/Equity-research/2023/3/inission---q4-an-exercise-in-accounting/