Nolato: Expect gradual improvements throughout '24e - ABG

Q1e: still some de-stocking weighing on Medical
Minor revisions, '25e-'26e EBITA up by 1% on FX
Strong recent performance, cons. f12m EV/EBITA 17x


Q1e: de-stocking still to weigh on Medical

We expect Nolato to report Q1 sales of SEK 2,322m, down 6% y-o-y (-6% organic growth). As management warned following the Q4 report, we expect continued de-stocking in Medical, particularly in surgical equipment, which should weigh on both organic growth and margins. Within Engineering Solutions (Nolato's new segment, a merger of Integrated and Industrial), vaporiser heating products should now have stabilised on a sequential basis, albeit still down y-o-y, but the shortfall is now small enough to have a very limited impact at the group level. We estimate an EBITA of SEK 195m, roughly flat y-o-y, for a margin of 8.4% (7.8%). We are 1% below FactSet consensus on Q1 EBITA ahead of the numbers.

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