Sales +4% vs ABGSCe

Adj. EBITA well above expectations

Gross margin up c. 2.5pp. y-o-y

Sales 4% above our expectations
Sales grew 4% y-o-y and came in at SEK 133m, which was 4% above our expectations. As we saw in the Q2 report, Norway is lagging Sweden and Finland, with a revenue decline of 1% y-o-y compared to the others which grew its revenues y-o-y by 3% and 9%, respectively.

Continuing to decrease OPEX
The company is continuing its cost-efficiency journey. On the gross margin side, we note a heavy increase (+2.5pp. y-o-y) due to product mix and pricing, well above our expectations and the explaining factor to the beat. On the OPEX side we note a continued decline in absolute terms, in line with expectations, an effect of the cost efficiency measures we’ve seen throughout the year. In sum, the company reported an adj. EBITA margin of 13.6% for an adj. EBITA of SEK 18.2m, which was 73% above our expectations.

cons. adj. EBITA estimates likely up by single digits
Svedbergs is continuing its solid performance. Just adjusting for today’s results would raise our ‘20e adj. EBITA estimates by 10%. We expect positive consensus single-digit estimate revisions on ’21-‘22e on the back of the strong reported gross margin.

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