Nordic Waterproofing: Bid situation overshadows Q3 numbers - ABG

Q3e: Price tailwind to wear off in H2, still neg. volume
EBIT -5% on softer margin estimates
Share trading above incoming SEK 160/sh bid


Price tailwinds to wear out in H2, neg. volume remains

For Q3, we expect Nordic Waterproofing (NWG) to report sales of SEK 1,166m, up 3% y-o-y (-8% organic, +4% M&A, +7% FX). Volume growth is expected to remain in negative territory at -8% for H2, while we believe the tailwind from latent price hikes should be gone by Q3, and we have price growth at -2% for Q4 given that rubber roofing peers in continental Europe (e.g. Carlisle and Firestone) have lowered prices somewhat, according to NWG. We expect EBIT of SEK 115m, down 10% y-o-y, and a margin of 9.8% (11.3%), with earnings down y-o-y in Taasinge (prefab elements) and SealEco (rubber roofing in continental Europe), while the core bitumen business will likely continue to defend earnings better.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nordic-waterproofing/Equity-research/2023/10/nordic-waterproofing---bid-situation-overshadows-q3-numbers/