Relais: Lighting season started later this year – slight miss in Q3 despite solid organic growth - Nordea

Relais reported Q3 adjusted EBITA of EUR 9.2m, 9% below LSEG Data & Analytics consensus. Organic sales growth was 4% y/y in Q3, in line with our expectation. Net sales were EUR 74.9m (up 7% y/y), 3% below consensus expectations. FX did not have an impact on EBITA level. Equipment and Lighting sales missed our estimates while other product groups beat. Lighting season has started 1-2 weeks later while the company note that sales have returned to normal levels after Q3. Sales increased 4% y/y (+5% organic growth) in Scandinavia and 10% y/y (+3% organic growth) in Finland-Baltics. Gross margin came 40bp above consensus expectations and was up 220bp y/y to 48.1%, supported by increased weight of Repair and Maintenance as well as improved sales margins in Technical Wholesale and Products. EPS of EUR 0.26 came 7% below consensus expectation of EUR 0.28. Operating cash flow was EUR 4.3m (EUR 4.5m a year ago) while leverage remained at 3.0x (3.0x at the end of Q2). Inventories were up 6% sequentially and up 14% y/y, mainly due to 1-2 week later start to lighting season. Hence, Q4 cash flows could be supported by shift from Q3 to Q4. Relais does not give short-term outlook for 2024 but sees stable market situation for Q4. On initial take, we believe consensus to trim 2024E estimates slightly due to Q3 while do not expect any material changes on 2025E-26E estimates.

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