Nolato: Margins creeping up - ABG

• Q2 report due on Thursday, 20 July
• Sequential earnings growth to continue, but down y-o-y
• H2 comps looking easier, 16-12x '23e-'24e EV/EBITA

Q2e: earnings improvement vs. Q1'23, but down y-o-y
Across all segments, we expect to see sequential earnings growth, although still down y-o-y, as the company takes another step in its margin recovery journey. Plastic and silicone input costs (~60% of COGS) should be similar to Q1 as the oil price has been stable, while energy costs should be down sequentially. For Medical, the company made clear in the Q1 conference call that the poor sales mix from less high-margin IVD sales is expected to continue into Q2, and for Integrated our understanding is that sales have now levelled out at a lower level (and with a lower margin), with the company working to scale down the opex base somewhat to adapt. All in all, we expect net sales of SEK 2,655m, down 9% y-o-y (-16% organic,+7% FX), and EBITA of SEK 222m, down 16% y-o-y but up 15% q-o-q, for a margin of 8.4% (9.1% in Q2'22, 7.8% in Q1'23)