Nolato: Downsized VHP business reflected in ests. - ABG

Gradual q-o-q margin improvement should continue
New estimates reflect downsizing of tobacco business
13x '24e EV/EBITA, 19% '23e-'25e adj. EBITA CAGR


Gradual sequential improvements should continue

We expect Q3 sales of SEK 2,369m, down 10% (-13% org, +3% FX), with Integrated weighing on organic growth. On the margin side, we expect more sequential improvements on lower electricity prices, better utilisation (has mainly been an issue in Industrial), and yet more easing cost pressure on certain grades of plastics and silicones. All in all, we expect a Q3 adj. EBITA of SEK 202m, for a margin of 8.5% (8.1%), while reported EBITA is burdened by an announced SEK 60m one-off from the scaling down of the VHP business. Moreover, with comps getting notably easier into Q4 and further sequential improvements, we expect Q4'23e to be the first quarter since Q4'21 with positive y-o-y EBITA growth.

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