Poolia
Poolia - War chest increases with recovery in sight (ABG Sundal Collier)
2020-07-24 16:32
Sales +12% vs ABGSCe, -21% y-o-y
Positive revisions as profitability surprises
No liquidity risk on current COVID-19 restrictions
Q2: Sales +12% and adj. EBIT +SEK 20m vs ABGSCePoolia reported net sales for Q2 of SEK 345m (439m), corresponding to a y-o-y decline of 21% as COVID-19 restrictions had a negative effect on the business. However, it was 12% above ABGSCe and the positive deviation was explained by better performance from Uniflex Sweden. In addition, Poolia also performed better than expected in Sweden and Finland, but that was offset by the Uniflex segment underperforming in Finland, Norway and Germany. Adj. EBIT was SEK 4.1m (2.9m), roughly SEK 20m better than we expected, thanks to the Swedish operations. In general, the less strict COVID-19 restrictions in Sweden have favoured Poolia vs. the other markets where it operates. Profitability-wise, it was much better than feared, with all segments except Germany showing positive EBIT results in the quarter. In Germany, swift action was taken as the CEO of the branch was replaced towards the latter part of Q2. Cash flow was strong and the cash position at end-Q2 was SEK 81.4m.
Long-term EBIT revisions up by 14-10%
We increase our sales estimates by 6.1-3.6% for ’20-‘22e as the positive deviation is extrapolated into H2 2020. For the following years, we had already counted on a recovery, which is why the sales estimates were raised to a lesser extent. We estimate that group sales will recover to 2019 levels in 2022e. For EBIT, we raise our 2020 estimates by roughly SEK 30m based on the positive deviation in Q2 and a slightly more optimistic view on H2. For ’21-‘22e, we raise our assumed EBIT margin by 0.2pp, resulting in EBIT revisions of +14-10%.
Share trading at EV/EBIT of 6.5x for 2021e
The share has outperformed OMXSTHPI by ~16% during the last three months but is still trading below its historical average on EV/sales. With the strong cash position and signs of economic recovery in sight, we do not foresee any l
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