Sales +21% vs ABGSCe

Adj. EBIT +26% vs ABGSCe

Expect positive cons. revisions

Strong growth driven by M&A
Swedencare reported a strong Q3 report, growing by 119% (27% organic) to SEK 69.6m, which was 21% above our expectations. As expected, the majority of growth was driven by the Stratford acquisition, which has continued to show exceptionally strong y-o-y growth as well. On the margin side, a lot has naturally happened on the back of M&A. The adj. EBIT margin came in at 29% for an adj. EBIT of SEK 20m, 26% above our expectations.

Q3 details
Net sales SEK 70m (21% vs ABGSC 57m), EBITDA SEK 21m (21% vs ABGSC 17m), Adj. EBIT SEK 20m (26% vs ABGSC 16m), EBIT SEK 19m (17% vs ABGSC 16m), EPS SEK 0.83 (15% vs ABGSC 0.72).

Strong report overall, expect positive consensus revisions
Swedencare’s Q3 report was exceptionally strong overall, above our expectations. Just adjusting for today’s results would mechanically raise our ‘20e adj. EBIT by 7%, and our initial view is to expect positive consensus estimate revisions of mid-single digits.

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ABG Sundal Collier - Introduce.se