Nolato: Lower Q2 guidance for Integrated Solutions - ABG

Adj. EBITA SEK 267m (+10% vs. Infront cons. 242m)
Guides for -20% q-o-q growth in Integrated Solutions
14-11x ’22e-’23e EV/EBITA on pre-Q1 numbers

Q1 outcome
Sales were SEK 2,879m (+8% vs. ABGSCe 2,665m, +7% vs. Infront cons 2,690m), up 9% y-o-y (of which 1% organic vs. ABGSCe 0%). EBITA was SEK 267m (+12% vs ABGSCe 239m, +10% vs. cons 242m), for a margin of 9.3% (ABGSCe 9.0%, cons 9.0%), with no NRIs. Net profit was SEK 201m (+17% vs. ABGSCe 171m, +14% vs cons 176m). Q1 EBITA ended up being ~10% above pre-announced figures, with all segments slightly higher on sales than what had been communicated. However, the results are still somewhat below where expectations were prior to the pre-announced numbers. The drivers for the softer quarter, according to the company, were shortages of components and personnel, leading to customers periodically reducing production capacity. Also, Russia’s invasion of Ukraine affected end-market VHP sales negatively.

Estimate changes and outlook
Overall, we expect negative consensus revisions of 2-3% on EBITA. While the Q1 figures in isolation were above what had previously been announced, the company guides for -20% q-o-q growth in Integrated Solutions in Q2 with a similar margin. This implies EBITA of ~SEK 98m in Q2 in the segment (-30% vs. ABGSCe 141m).

Final thoughts and conference call details
On our pre-Q1 estimates, the share traded at 14-11x ‘22e-’23e EV/EBITA going into the report, with an estimated adj. EBITA CAGR of 11% for ’21-’24e.
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nolato/Equity-research/2022/5/nolato---lower-q2-guidance-for-integrated-solutions/