Midsona: Strengthened balance sheet coming up - ABG

Q3 report softer than anticipated
We decrease our ’23e-‘24e EBITA ests. by 5-3%
Trading at ‘23e-‘24e EV/EBITA of 8.8-6.7x


Q3 report summary

Midsona’s Q3 reported figures were below our estimates on both sales (SEK 944m vs. ABGSCe SEK 1,006m) and profitability. The combination of cost inflation and a lag on transferring incremental cost increases to customers through pricing pressured the gross margin to 17.9% vs. our estimated 25.2% in Q3. This resulted in adj. EBITDA of SEK 50m vs. our estimate of SEK 73m. Further, the management team decided to write down both goodwill and certain tangible assets by a total of SEK 475m, stemming from both lower estimated cash flows for the North Europe and South Europe segments alongside a higher applied discount rate. That said, the management team also expressed cautious optimism regarding Q1’23e, as price increases are anticipated to take effect while the cost base is expected to stabilise.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/midsona/Equity-research/2022/10/midsona---strengthened-balance-sheet-coming-up/