Nordic Waterproofing: Prefab still weighing on margins - ABG

Prefab struggles, Installation Services better
Lowered margin expectations in Products & Solutions
12.6-10.5x '23e-'24e EV/EBIT, fair value SEK 155-220


Strong organic growth, but a disappointment on margins

Nordic Waterproofing (NWG) reported Q4 sales 4% above our expectations, with 6% organic growth (ABGSCe 2%), of which +13% from price and -7% from volumes. Although sales were strong, adj. EBIT came in at SEK 59m (ABGSCe 72m), for a softer margin of 5.7% (ABGSCe 7.2%, Q4'21 6.6%). This includes a positive NRI of SEK 7m in the Installation Services (IS) segment tied to a revaluation of NWG's stake in Playgreen (which was not included in our prior fast comment). Even when adjusting for the one-off, IS was still above our expectations, while Products & Solutions (P&S) struggled, particularly in the prefab business (~15% of NWG), which accounted for roughly half of the y-o-y EBIT decline in the segment.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nordic-waterproofing/Equity-research/2023/2/nordic-waterproofing---prefab-still-weighing-on-margins/