Nolato: Guides for continued VHP decline in Q3 - ABG

Adj. EBITA SEK 264m (+10% vs. Infront cons. 241m) Expect 4-6% cons. downgrades on weak guidance 15x ’22e EV/EBITA, conference call at 14:45 CET
Q2 outcome Sales were SEK 2.91bn (+13% vs. ABGSCe 2.56bn, +13% vs. Infront cons 2.58bn). EBITA was SEK 264m (+13% vs ABGSCe 234m, +10% vs. cons 241m), for a margin of 9.1% (ABGSCe 9.1%, cons 9.3%), which included no NRIs (ABGSCe 0m, cons. 0m). Net profit was SEK 190m (+13% vs. ABGSCe 168m, +9% vs cons 175m). Integrated Solutions was affected heavily by lost sales in Eastern Europe, but Q2 EBITA still came in ~10% above prior company guidance due to an earlier delivery being made in June (which was planned for July). Medical Solutions EBITA came in +14% vs. cons, but was affected by higher material costs that were not fully moved on to customers due to a lag effect.

Estimate changes and outlook We expect consensus adj. EBITA to come down by 4-6% despite EBITA coming in above consensus, which is due to the weak guidance in Integrated Solutions. The company guides for -25% q-o-q growth in Q3, which implies Q3 sales 34% below ABGSCe (mathematical effect on FY’22e group sales of 3%). The primary reason given was lost sales in Eastern Europe, which seems to have a bigger effect than we had initially feared.

Valuation and conference call details On our pre-Q2 estimates, the share is trading at 15x ’22e EV/EBITA. Finally, the company will host a conference call at 14:45 CET, dial-in SE: +46850558358, UK: +443333009271. The presentation can also be viewed via livestream at: https://financialhearings.com/event/43263.

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