Seafire: Temporary costs and consumer weakness - ABG

Sales -1% and adj. EBITA -14% vs. ABGSCe
Weakness in DOFAB, Nordbutiker; temporary higher costs in others
Mixed outlook: weak consumer, but stronger industry performance


Q2 results

Sales came in at SEK 286m (-1% vs. ABGSC 290m), +1% y-o-y (-11% organic). EBITA was 20m (-29% vs. ABGSC 28m), and adj. EBITA was 24m (-14% vs. ABGSC 28m) for a margin of +8% (ABGSC +10%). Adj. net income was 13m (-19% vs. ABGSC 16m) for a margin of +5% (ABGSC +6%). The company produced lease adj. FCF of 0m, +100% y-o-y. Linguacom bankruptcy one-off of SEK -23m reported as discontinued ops. Adj. EBITA misses our estimates on continued weakness in consumer-facing businesses Nordbutiker and DOFAB, as well as temporarily higher costs in some Industry companies. FX also affected profitability negatively. The temporarily higher costs were connected to expenses for succession in multiples subsidiaries, as well as some investment projects which were concluded in the quarter. Disregarding the consumer-facing businesses, a majority of the remaining subsidiaries experienced organic growth and increased profitability in H1.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Seafire/Equity-research/2023/8/seafire---temporary-costs-and-consumer-weakness/