Nordic Waterproofing: Decent Q3, bid situation remains the focus - ABG

Q3 mostly in line, but more volume decline to come
EBIT down 3% for '23e-'25e, mainly on lower volumes
Bid situation overshadows operational performance


Earnings in line, but volumes are yet to trough

Nordic Waterproofing's (NWG) sales beat of 4% was driven by better volume growth (-4% vs. ABGSCe at -8%), while latent price hikes no longer contribute to y-o-y organic growth. According to management, however, volumes have not yet bottomed out, and further declines are expected for 2024. Some smaller sub-segments are also seeing price pressure, but this should have limited effect on group-level organic growth. Despite higher sales, EBIT was in line with our expectations and 2% below consensus, and the main problem areas for profitability continue to be prefabricated elements and rubber-roofing in Continental Europe. Finally, cash conversion was strong due to low capex and slight NWC release, resulting in FCF/EBIT of ~120%.

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