Nordic Waterproofing: Most of the volume decline is likely behind us - ABG

Q4 report due on Tuesday 6 February
No major estimate changes, bid still in focus
12x '24e EV/EBIT, 7-8% '23e-'25e FCF yield


Q4e: poor market to start bottoming out

We expect Nordic Waterproofing (NWG) to report Q4 sales of SEK 1,037m, down 1% (-4% organic, +2% FX, +1% M&A). Effects from latent price hikes had already faded by Q3 and we expect no effect from prices in Q4e, followed by slight price pressure in '24e. Volumes, although still negative (-4% for Q4e, -2% for '24e), are starting to bottom out, and we currently expect that a gradual market recovery will start to be seen in H2'24e. We expect EBIT of SEK 68m, +14% y-o-y despite the somewhat lower top line, given that NWG has by now scaled down costs in its main problem areas (most notably in the prefabricated elements business). Cash flow should be strong due to the typical seasonal working capital release seen in Q4.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nordic-waterproofing/Equity-research/2024/1/nordic-waterproofing---most-of-the-volume-decline-is-likely-behind-us/