Ogunsen: Still strong demand in Q2 - ABG

Q2 sales +6% above ABGSCe We make positive revisions on the back of the report Good start to Q3, monitoring any market weakness

Q2: Sales +20% y-o-y, EBIT margin of 10.9% (11.2%) Ogunsen reported Q2 sales of SEK 126m (+20% y-o-y), 6% ahead of ABGSCe. The deviation was driven by a slightly higher number of employees alongside higher revenues per employee for the staffing business. Recruitment revenues amounted to 13% of total sales whereas we expected 16% of total revenues. Despite this, Ogunsen’s Q2 EBIT margin was higher than ABGSCe at 10.9% vs. our expected 10.5%, a strong result given that recruiting revenues have a higher margin contribution. EBIT was SEK 13.7m (11.8m), 10% above ABGSCe. Macro concerns remain in place given high inflation and rising interest rates, but the company has seen no impact as yet, with Q3 starting out with solid demand. Ogunsen does not see any sign of lower demand, although it is monitoring the situation closely. The overall staffing market tends to be cyclical, but Ogunsen has recently broadened its geographical reach, which should offset a potential weaker market in the coming quarters.

We raise ‘22e-‘23e EBIT by 3-2% following the Q2 beat The Q2 performance exceeded our expectations, and we have consequently made positive revisions. For ‘22e, we raise our sales estimates by 1.7% and our EBIT estimate by 2.6% and for ‘23e we raise sales and EBIT by 1.6% and 1.8%, respectively. Ogunsen is currently operating above a 10% EBIT margin, which is in the upper range of its historical performance. We think it will be hard to reach much higher and expect the EBIT margin to be slightly lower in ‘23e.

‘22e P/E of 10x, EV/EBIT of 7x and 8.8% dividend yield The share is currently trading at a P/E of 10x, EV/EBIT of 7x and with an expected dividend yield for ‘22e of 8.8%. The P/E and EV/EBIT valuations are ~30% below its historical three-year average. Ogunsen ended Q2 with a net cash position of SEK 53.5m with no long-term debt.

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