Nilörngruppen: Customer destocking signals are appearing - ABG

- Retailers' underlying operations still weak...
- ...but destocking is coming
- '23e-'25e EBIT down 6-5%

What to look for in Q2'23e
Some retailers that have reported Q2'23 figures have showed that inventories are starting to come down: that is, all else equal, positive for business momentum in the sector. However, we expect that a destocking of inventories will take time, and we are therefore cautious with extrapolating a single data point to a multi-quarter period. We continue to believe that Q2'23e, and to some extent H2'23e, will be difficult. Therefore, we cut Q2'23e sales by 4% and EBIT by 11%, implying -23% org. growth y-o-y and an EBIT margin of 10.6%. The order intake could once again decline sequentially by low-to-mid-single digits, to SEK 210m-215m, given that clients are still overstocked. On a technical note, we are more confident regarding the direction of the order book (i.e. that we expect a decline) than the magnitude of the decline.

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/6312d239cf52425b946b73c1f902d8d8/pdf/customer-destocking-signals-are-appearing.pdf