Inission: Very strong 8% EBITA margin in Enedo - ABG

Sales +0% and adj. EBITA +23% vs. ABGSCe
EBITA beat driven by strong execution in Enedo
Order intake remains good, M&A market waking up

Q2 results
Sales came in at SEK 562m (+0% vs. ABGSC 559m), +62% y-o-y (+21% organic). EBITA was 41m (+23% vs. ABGSC 33m), and adj. EBITA was 41m (+23% vs. ABGSC 33m) for a margin of +7% (ABGSC +6%). Adj. net income was 25m (+25% vs. ABGSC 20m) for a margin of +4% (ABGSC +4%). The company produced lease adj. FCF of 22m, +143% y-o-y. This was another strong quarter, with the EBITA beat this time being driven by a very strong 8% margin in Enedo vs. the expected and company target of 4%. We found nothing in the report about this being a one-off, just good execution.

Estimates and outlook
On numbers alone, '23e sales are unchanged and adj. EBITA comes up 5%. Management states that order intake remains good, component shortages are continuing to improve, and that Inission continues to invest in staff. They also state that the M&A market seems to be slowly waking up, and that Inission has participated in a few processes. They reiterate that they are looking for potential acquisitions in the Nordics, but also in northern Germany and Benelux.

Valuation
The share is up +89% YTD (vs. OMXSPI +4%), and is currently trading at 12x '23e EV/EBITA or 15x '23e P/E on our pre-report estimates. There is a conference call with management at 08:30, which can be attended via Microsoft Teams. Deviation tableSource: ABG Sundal Collier Estimates, Company DataNo consensus available

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