DistIT
DistIT - Restructuring largley done, time for growth (ABG Sundal Collier)
2019-08-20 08:45
Restructuring initiatives take their toll
Adj. EBIT SEK 12m (-16% vs. ABGSCe SEK 14m)
Surprising reporting change mid-year
Anticipated weak EBIT, but gross margin improvingAs expected, Q2’19 was tough with current restructuring efforts temporarily dragging. Sales were SEK 532m (-3% vs. ABGSCe at SEK 546m), up 4% y-o-y. The group, however, did not communicate organic growth vs. M&A growth, but we estimate: ~3% M&A and ~1% organic. Gross margin improved to 23.2% (22.0%) and benefitted from an increasing share of EMV sales and favourable B2B sales. As previously communicated, profitability was burdened by SEK 16m relating to restructuring costs mainly due to the integration of Aurora and Deltaco. Adjusted for the impact, EBIT was SEK 12m (-16% vs. ABGSCe at SEK 14m), on a margin of 2.3% (2.5%), ABGSCe 2.6%.
Further restructuring & changed reporting excluding IFRS 16
With further restructuring costs in Q3’19 of SEK 8m communicated at the quarterly report, we lower our EBIT assumptions accordingly. DistIT expect total cost savings of its 2019 restructuring initiative of SEK 47m, expected to be realised in ’21e at the latest. To account for associated risks, we implement ~75% into our numbers (~SEK 35m). We were surprised to see that DistIT reported Q1’19 including IFRS 16 effects but excluded them in Q2’19. According to the company, it will continue using the latter format throughout 2019. We have changed both estimates and Q1’19 figures to exclude the IFRS 16 effects. The impact is mainly on EBITDA and debt estimates, while EBIT is only marginally impacted. Additionally, we raise sales estimates for ’20-21e by 1%.
Share is trading at 6x EV/EBIT 2020e
The share is up 17% YTD and is currently trading at ’19e EV/EBIT of 7.3x (5.9x in ’20e). On a forward 12-month basis, EV/EBIT is ~7x, which is around 35% below its three-year historical average of 9.5x. Now with the finishing of the integration between Aurora and Deltaco coupled with realised sale of real estate in Q3, the focus
...
- Läs mer på Introduce
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
info@introduce.se (Introduce.se)
ABG Sundal Collier - Introduce.se