Nolato: Lower sales, but higher margin - ABG

- EBITA SEK 245m (0% vs. ABGSCe, +2% vs. Modular Finance IR cons)
- Company expects bigger vacation effect in Q3 than recent years
- We expect consensus EBITA to remain fairly unchanged

Q2 outcome
Sales were SEK 2,439m (-3% vs. ABGSCe 2,504m, -2% vs. Modular Finance IR cons 2,482m), down 2% y-o-y, of which -2% organic growth (ABGSCe 0%). EBITA was SEK 245m (0% vs ABGSCe 246m, +2% vs. cons 239m), for an EBITA margin of 10.0% (ABGSCe 9.8%, cons 9.6%). Both segments saw a margin lift, but the EBITA beat vs. cons was driven by the Engineering segment (+13% vs. cons on EBITA), rather than the more important Medical segment, which was 1% above cons. Cash flow was strong thanks to a working capital release, resulting in an FCF/EBITA of 137%.

Estimate changes and outlook
Although Q2 was a slight beat vs. consensus, Nolato also flags that Q3 could have a bigger vacation effect than has been the case in recent years, i.e. they are guiding down Q3 numbers. All in all, we do not expect any material revisions to consensus EBITA estimates.

Valuation and conference call details
On our pre-Q2 estimates (and on yesterday's closing price) the share is trading at 18x '24e EV/EBITA; which goes to 16x for '25e. Finally, the company will host a conference call at 13:45 CET

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nolato/Equity-research/2024/7/nolato---lower-sales-but-higher-margin/