Pricer: Tough order comps, but good mix for GM - ABG
- Q2 due Thursday, 18 July, 08:30 CET
- We expect lukewarm orders, but a continued high gross margin
- We reduce '24e-'26e sales on FX and some market headwinds
Key customer cost savings to affect orders
For Q2'24, we expect sales of SEK 730m (up 6% y-o-y), and orders of SEK 705m (up 4% y-o-y). Both Q1'24 and Q2'23 represent tough comps for order intake, with pre-announced orders for Q2'24e of SEK 127m compared to SEK 70m in Q1'24 and 160m in Q2'23. While the recently announced SEK 90m order from a North American customer was encouraging and provides ample scope for more growth with this customer, key customer Carrefour has announced a cost-savings target of EUR 1.2bn, which we expect to be a headwind for Pricer's orders in Q2. However, we expect this to be a tailwind for the gross margin as it provides a better mix, and we note that the gross margin has improved recently.Therefore, we expect a gross margin of 19.1%, up 3.1pp y-o-y, and flat q-o-q. In terms of EBIT, we forecast SEK 43m (vs. SEK -3m in Q2’23 and SEK 21m in Q1'24), on the back of recent cost savings.
We tweak our sales and order forecasts
We increase order intake for Q2e, but with negative revisions for subsequent quarters, resulting in 0-2% lower order intake for '24e-'26e. Furthermore, we lower our Q2 sales assumptions, which together with recent FX movements lowers '24e-'26e sales by 2-4%. Consequently, our EBIT estimates are cut by 5-4%, largely on flat opex estimates, with a corresponding EBIT margin of 5.5-6.3% in '24e-'26e.
Good prospects for more profitability improvements
Although we expect orders to be lukewarm and FX movements to present headwinds, we continue to see prospects for Pricer to report strong growth in the coming years, driven by its strong position in a growing market and an improved margin outlook. We forecast '26e sales of SEK 3.8bn, corresponding to a '24e-'26e sales CAGR of 13%. The share is trading at 0.6x EV/S and 10x EV/EBIT on our new 2025 forecasts.
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