Nordic Waterproofing: Weathering the storm - ABG

Q1 report due on Tuesday, 25 April
Volatile weather should make for a soft quarter
'23e trough earnings EV/EBIT of 12x, 10x for '24e


Soft Q1 on volatile weather and fading price hikes

While Q1 is already a seasonally weak quarter for Nordic Waterproofing (NWG), we expect a particularly soft quarter this year due to 1) volatile weather, which makes bitumen roofing installations difficult, 2) lower volumes, especially in Taasinge (prefabricated elements) and SealEco (EPDM rubber), and 3) the fact that latent price hikes (which have previously covered up for declining volumes) are gradually starting to fade while volumes are likely to continue declining. As such, we estimate net sales of SEK 971m, up 6% y-o-y thanks to M&A/FX, but down 4% organically (-9% volume, +5% price). On the aforementioned poor weather conditions and under-absorption on lower volumes, we have estimated an EBIT of SEK 6m (down from our prior estimate of SEK 17m), for a margin of 0.6%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nordic-waterproofing/Equity-research/2023/4/nordic-waterproofing---weathering-the-storm/