Projektengagemang: A welcome increase in FTEs q-o-q - ABG

Q2 net sales 6% below ABGSCe We trim our long-term EBIT estimates by 10% Fair value range of SEK 17-29 (20-33) Q2: Organic sales growth -4% y-o-y on high sick leave
Projektengangemang (PE) reported Q2 net sales of SEK 245m (-12% y-o-y), 6% below ABGSCe. The deviation was evenly spread between the three segments, and around 3-4% of the sales decline was caused by higher sick leave vs. last year. The company saw organic sales growth of -4%, but was reported a higher number of FTEs q-o-q for the first time in over two years. We think that is a good sign for the coming quarters, especially in combination with a high utilisation rate in Q2, an increase in the order book and higher eNPS levels. EBITA was SEK 14.8m (23.5m) and was affected by SEK 7m in IAC, half from a final settlement regarding short-term COVID-19 layoffs and half from obligations from discontinued operations. Adj. EBITA was SEK 21.8m and 7% below ABGSCe, with the deviation explained by the lower sales level.

Resetting expectations, still see growth opps. for ‘23e Management reiterates its positive view on future possibilities and has not yet seen any project delays. We argue that the risk for project delays is elevated due to high inflation rates, particularly in the private housing market. As PE has an exposure to real estate of ~90% of total sales, it will obviously keep a close eye on market developments, but it is worth mentioning that the exposure to the private housing market is only around 15% of total sales. With that said, we trim our sales ests. by 3-4% for ‘22e-24e on the Q2 deviation and a slightly lower net recruitment pace. Our EBIT estimates are down 22-10% for the same period.

‘23e EV/EBIT of 9x with ~6% expected dividend yield We see PE returning to sales growth in Q4, as the divestiture of the railway business will no longer have a negative effect on y-o-y comparisons from mid-Q3. Our fair value range is lowered to SEK 17-29 (20-33) to reflect estimate changes and on our numbers, PE is trading ... Läs mer på ABG Sundal Collier

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