Nilörngruppen: Weakened demand nowhere to be seen - ABG

Sales +21% vs ABGSCe, EBIT +67% vs ABGSCe Organic growth of 39% (+10pp. vs ABGSCe 29%) We expect cons. to lift EBIT estimates by 10-20% Q2’22 at first glance

Nilörn reports Q2’22 sales of SEK 269m (+21% vs ABGSC 222m), gross profit SEK 118m (+24% vs ABGSC 95m), EBIT SEK 95m (67% vs ABGSC 27m), net profit SEK 36m (+79% vs ABGSC 20m), EPS SEK 3.2 (79% vs ABGSC 1.77). Nilörn continues to perform very well showing continued strength and momentum in Q2. Order bookings continue to grow well into the double-digits, with the company showing good leverage on the margin, coming in at 17% in Q2. The company has been able to ensure deliveries despite the warehouse in Shanghai having been shut down for most of the quarter, a very impressive effort.

Q2’22 thoughts and outlook Looking at the organic growth of 39% (+10pp. vs ABGSCe 29%), the overperformance looks to be broadbased, with Germany performing strongly. Furthermore, the newer markets in the southern of Europe coupled with the US is said to see an encouraging development. The gross margin contracted to 44%, down 3.6pp y-o-y but still above our expectations (+1pp. vs ABGSCe of 43%). A decline was expected, partly due to the issues in China. Concerning the outlook, mgmt. states that while the macroeconomic environment is very uncertain, order intake continues to look encouraging. We acknowledge the uncertain environment, but also note that the company on an LTM basis has posted an adj. EBIT margin of 16%, 6pp above the financial targets.

We expect cons. estimate revisions by some 10-20% The Nilörn share has outperformed the market and is up +29% YTD and is trading at 10x EV/EBIT in ‘22e on our unrevised estimates. Mechanically, the estimated effect on isolated Q2 numbers would be 5% on 2022 sales and 15% on EBIT. Looking at ’23-‘24e, we expect cons. to lift sales and EBIT estimates by some 10-20%. Nilörn will host a conf call today at 11.00 CEST. Link: Join Live Event.

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