Nordic Waterproofing: EBIT 4% below cons, mainly margin-driven - ABG

- EBIT SEK 131m (-11% vs. ABGSCe, -4% vs. FactSet cons)
- We expect consensus EBIT to come down by 2-3%
- Trading at 14-10x '24e-'25e EV/EBIT on our pre-Q2 estimates

Q2 outcome
Sales were SEK 1,196m (-1% vs. ABGSCe 1,208m, -1% vs. FactSet cons 1,213m), down 7% y-o-y, of which -8% was organic (ABGSCe -7%). EBIT was 131m (-11% vs. ABGSCe 146m, -4% vs. cons 137m), down 8% y-o-y, for an EBIT margin of 10.9% (ABGSCe 12.1%, cons 11.3%). Both segments came in below our expectations on EBIT; Products & Solutions -10% and Installation Services -18%. Cash conversion was strong at 82% FCF/EBIT.

Estimate changes and outlook
The company expects a commercial newbuild demand will remain at current levels for the remainder of the year, while residential also remains at current, depressed levels. In '25, it expects improvements in all main markets except for Finland (~30% of sales), which is expected to remain unchanged. We expect consensus EBIT to come down by 2-3%.

Valuation and conference call details
On our pre-Q2 estimates, the share is trading at 14x '24e EV/EBIT, which goes to 10x in '25e, while offering 6-9% lease adj. FCF yield for '24e-'26e. Finally, the comapny will host a conference call at 10:00,

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nordic-waterproofing/Equity-research/2024/7/nordic-waterproofing---ebit-4-below-cons-mainly-margin-driven/