Svedbergs: Roper Rhodes is the highlight - ABG

• UK continues to support the group
• Rebalancing expectations lead to -3% on '23e estimates
• We lower our fair value to SEK 31-46 (33-48)

Q2: Strong UK, soft FCF
Svedbergs continues to show relative strength vs. general home improvement with Q2'23 net sales of SEK 456m (-2% vs. ABGSCe) for -3% y-o-y growth (-8% org.). UK business Roper Rhodes shows continued strength with 5% org. growth in Q2'23 despite a market decline of ~10-11% in the UK (company estimate). In the Nordics, the Svedbergs brand shows softer momentum with a 23% y-o-y decline. Macro Design and Cassoe saw a tough market with 27% and 23% org. declines, respectively. Favourable freight rates and FX development alongside effective price increases, mainly for Roper Rhodes, resulted in a y-o-y 110 bp improvement for 42.6% in Q2'23. Despite the better gross margin, lower top-line and higher selling expenses led to Q2'23 EBITA of 58m (-11% y-o-y), -4% vs. ABGSCe, for a margin of 12.6%. Q2 FCF was strong at SEK 100m, supported by a tax refund of SEK ~30m.

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/dc6c207140a6422c8cffae3ec07bde62/pdf/roper-rhodes-is-the-highlight.pdf