Nilörngruppen - Significant volume driven beat in Q1
Strong Q1 trading update Growing 25% organically to sales of SEK 175m Significant operational leverage, 15% EBIT margin Q1 sales SEK 175m, EBIT 27m Nilörngruppen continues to beat expectations. This morning, the company released a trading update with pre-announced Q1 Sales and EBIT. Sales came in at SEK 175m (ABGSCe 158m) and EBIT at 27m (ABGSCe 11m). The company showed organic growth of 25% with stellar operational leverage.
As we saw during the end of 2020, Nilörn’s e-com customer base started to show material impact on group numbers. We suspect it is the same customer group that is driving the development this time as well, with the margins following. We have been cautious on 2021 earnings We have been cautious on 2021 earnings due to (1) significant governmental support throughout 2020 (2) other personnel cost savings during 2020 (3) increasing freight cost rates (4) normalising gross margins (5) low visibility in the customer mix.
(6) continued covid-19 related issues and (7) general supply chain constraints within the industry. The past two quarters have proved many of our worries wrong. However, we note that the governmental supports started during Q2’20, meaning that one should look into the rest of 2021 with caution related to the margins.
Margins normalising faster than cons. estimates Cons. has been cautious on 2021 earnings, pencilling in normalising margins during 2022.
Nilörn’s trading update points to margins normalising faster than current cons. estimates. Mechanically, the Q1 trading update points to a lift in cons.
EBIT estimates by c. 30% for 2021, while we expect significantly more cautious cons. upgrades for 2022-2023.
