Adj. EBITA +2% vs. ABGSCe and +1% vs. cons

Estimates should be relatively unchanged

16x ‘22e EV/EBITA on pre-Q2 estimates

Q2 results
Sales SEK 2,786m (-2% vs ABGSCe 2,850m, -3% vs. Infront cons 2,862m) +11% organically (ABGSCe 15%). Positive NRI of SEK 50m. Adj. EBITA SEK 336m (+2% vs ABGSCe 328m, +1% vs. cons 333m), on margin of 12.1% (ABGSCe 11.5%, cons 11.6%). Net Income SEK 291m (+20% vs. ABGSC 242m, +19% vs. cons 245m) includes positive NRI. Integrates solutions was 5% above cons on EBITA, Medical 2% below and Industrial 4% below. The margins were better across the board, but volumes generally disappoint. Nolato mentions that it was affected by supply chain disruptions, with component shortages causing some customers to halt production or reduce production capacity for short periods. This could explain the weakness in the industrial segment. Also mentions that it expects continues good sales for VHP products in Q3 (we have 4% increase sequentially from reported Q2 sales in our estimates). However, it also mentions that there is a risk of disruptions in the segment due to electronics shortages, we expect that this relates to the smaller non-VHP part of the segment.

Outlook and estimate changes
On our figures the Q2 results alone would imply relatively unchanged revisions on EBITA. However, consensus estimates are still too conservative for ‘23e when it comes to Integrated Solutions, and we think consensus har to come up by another 5% on ‘23e, (+3% on group EBITA).

Final thoughts
We expect it to trade down c. 3% on the report today, as the share traded strong into numbers and the report was not that impressive. However, we still like Nolato’s long-term prospects. On pre-Q2 numbers, Nolato is now valued at 16x ‘22e EV/EBITA, which is 40% discount to compounder peers with similar financial performance. For example, Nolato has 17% EBITA CAGR over the last 10 years (and M&A headroom of SEK 5bn ‘22e, able to sustain >15% EBITA CAGR going forward), on par with Lifco that trade
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