Svedbergs Group: Macro outlook gradually improving - ABG

Q3 report due 25 October
We forecast SEK 551m net sales, SEK 83m EBITA
We reiterate fair value range of SEK 39-55


Market outlook clearly improving in Q3

We believe the trough for the Swedish Byggmaterialindex, house transactions and build starts might be behind us, with Byggmaterialindex and house transaction indicators growing y-o-y (July +1%, +9% in Q2 respectively). As such, we expect sales declines to be smaller sequentially in Q3. We look for -15% organic growth y-o-y for the Svedbergs brand vs. -22% in Q2. In the UK, softer market data from CPA mean that we forecast a sequentially flat org. growth of 6% y-o-y in Q3 despite an easier growth comp. At the group level, this translates into +1% organic growth for net sales of SEK 551m (+27% y-o-y). We expect gross margins to remain strong on the back of price hikes and see Thebalux remaining clearly accretive for group EBITA of SEK 83m (growth of 40% y-o-y, of which a majority is Thebalux; margin +130bp y-o-y).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/svedbergs/Equity-research/2024/9/svedbergs-group---macro-outlook-gradually-improving/