Svedbergs: Beginning of the end of UK growth - ABG

Q1 report due 21 April
Q1'23e sales of SEK 462m, EBITA of SEK 61m
Share trading at 7x-6x '23e-'25e EV/EBITA


Soft Q1'23e demand mitigated by the brand

In Q4'22, softer consumer confidence was visible, with the Nordic brands driving a 9% organic net sales decline, but the group simultaneously managed organic growth in the UK. With house sales still soft in the UK, however, we forecast a slight net sales decline (org. -3%) for Roper Rhodes in Q1'23e, as we believe the pent-up demand from the pandemic could now have been satisfied. For the Svedbergs brand, we expect a Q1'23e top-line decline of 5% in a soft home improvement/DIY market with low transaction volumes. We expect Cassoe and Macro design to continue their trend from H2'22 and underperform the stronger brands, with 20% and 18% declines in Q1'23e respectively. All considered, we expect Q1'23e net sales of SEK 462m for organic growth of -7% y-o-y. We leave '23e-'25e net sales largely unchanged; we believe adverse trends for several macro indicators are adequately reflected in our estimates.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/svedbergs/Equity-research/2023/3/svedbergs---beginning-of-the-end-of-uk-growth/