Svedbergs: Limited signs of predicted UK weakness - ABG

UK outperforms our forecast
EBITA up 4-6% for '23e-'25e
We raise our fair value range to SEK 33-48 (31-46)


Q1 in brief

After continued strong operational performance, Svedbergs reported Q1'23 net sales of SEK 476m for y-o-y growth of -3% (-4% org.), 3% ahead of our forecast. By brand, we continue to see relative outperformance in the two main brands Svedbergs and Roper Rhodes, for which net sales declined by 3% and grew by 2% respectively. Price adjustments across brands led to a strong 41.4% gross margin, 10bp better sequentially and +40bp y-o-y. The slight sales decline meant that the SEK 64m adj. EBITA (13.5% margin) represented a 13% decline vs. SEK 73m in Q1'22, as opex levels were slightly higher following general cost inflation. The timing of UK VAT payments led to a soft cash flow, FCF excl. M&A was SEK -11m. Including the full Roper Rhodes earn-out, ND/EBITDA is still a healthy 2.3x and the stability of the business is further highlighted in this quarter.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/svedbergs/Equity-research/2023/4/svedbergs---limited-signs-of-predicted-uk-weakness/