Probi: Cautious outlook in Americas - ABG

Sales stabilising and EBITDA 7% above ABGSCe… … but macroeconomic environment could hurt demand ‘23e EBITDA down 2%, NTM EV/EBITA 20x Stabilising sales but cautious outlook
Probi delivered organic growth of -1% in Q2 (ABGSCe 0%), as the Americas region (70% of sales) stabilised the negative trend we have seen in the previous four quarters. However, management’s outlook for the US was cautious, highlighting initial indications of a slowdown, as the ongoing macroeconomic environment may dampen demand. EMEA was solid (11% y-o-y excl. milestone in Q2’21) and while APAC was a bit on the weaker side (3% y-o-y), these regions remain too small to materially impact the performance of the group. The EMEA figure should be viewed in light of Probi highlighting that the Perrigo rollout is slower than expected, and that the geopolitical situation has led the Oriflame launch in Russia and Ukraine to be delayed (other markets remain on target). The GM was somewhat lower on mix effects (45% vs. ABGSCe 47%), but this was offset by lower cash opex for an EBITDA margin of 26.3% (ABGSCe 24.2%), with EBITDA 7% above our expectations.

Three growth drivers for 2023 With the outlook for H2 on the cautious side, we look into 2023 where we see three promising drivers: 1) the roll-out of the third product with Sinopharm during H2, 2) the launch of the first strains from BLIS, which are set to widen its offering (ear, nose and throat) and have now started production, and 3) initial hopes on development of the partnership with Symrise, where the first order generated SEK 2.7m in sales (8% of Q2 EMEA sales) with more orders already expected in H2.

‘23e EBITDA down 2%, NTM EV/EBITA 20x We lower our expectations for the Americas following the report, where we expect volumes in H2 to be somewhat lower than Q2, and fine-tune our other estimates. Our underlying revision implies a ~5% cut to ‘23e EBITDA, but this partly offset by FX for -2% on reported numbers. The share is currently trading at an NTM EV/ ... Läs mer på ABG Sundal Collier

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