Swedencare
Swedencare - 78% y-o-y EBIT growth, woof! (ABG Sundal Collier)
2019-04-25 09:15
Q1’19: 41% sales growth (vs. ABGSCe 36%)…
…and EBIT of SEK 10.7m (+21% vs. ABGSCe)
NA and Asia strong, expect share up today
Sales and EBIT above our expectationsWe find Swedencare’s Q1’19 as solid, with both sales and profitability exceeding our expectations handsomely (despite some logistics issues). We note that growth was driven by North America and Asia, and that the gross margin increased y-o-y (again), which we view as comforting for coming quarters and years.
Q1 details
Sales +41% (LC +33%) y-o-y to SEK 30.6m (+4% vs. ABGSC 29.5m). Gross margin +280bp y-o-y to 76.2% (vs. ABGSCe 74.1%). EBIT +78% y-o-y to SEK 10.7m (+21% vs. ABGSC 8.8m), for a margin of 34.9% (vs. ABGSCe 29.8%). IFRS 16 is said to have had a minimal effect on the result.
Positive share reaction warranted
On back of the report, we believe that market expectations for earnings will come up. Although the share has been strong into the report, we expect it to trade up today.
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