Adj. EBITA 1% below ABGSCe, -3% vs cons.

Managing the component shortage well

29x NTM EBITA with solid growth prospects

Q2’21/22 results
Q2’21/22 was roughly in line with expectations on headline items. Sales were SEK 1,201m (-1%% vs. ABGSCe at 1,209m and -3%% vs. Infront consensus at 1,236m), up 31% y-o-y, of which 13% is organic growth (14% ABGSCe). All segments were strong and contributed to the volume growth. Additionally, Lagercrantz delivered another quarter of strong EBITA margins at 16.0% (ABGSCe 16.0%, cons. 16.0%), corresponding to adj. EBITA of SEK 192m (-1% vs. ABGSCe at 194m, -3% vs. cons. at 198m). The biggest deviation was on Net Income at 116m (-9% vs. ABGSCe at 127m, -6% vs. cons. At 124m), explained by higher-than-expected net financials. All in all, we consider the report to be solid and note that R12m EBT is SEK 641m. As such, the target of SEK 1bn in EBT to ‘25e seems well within reach.

Estimate changes and outlook
We adjust our ‘21e-‘23e net financials estimates on higher-than-expected net financials in Q2’21/22, resulting in net income falling -3-2% for ‘21/22e-‘23/24e. Otherwise, we only make small adjustments based on the deviations in Q2’21/22. Lagercrantz continues to handle component shortages, cost inflation and supply chain issues well. This performance, combined with a strong order intake in the quarter, bodes well for continued growth and strong margins. All in all, we expect ’20-‘23e sales and adj. EBITA CAGRs of 11% and 13%, respectively. However, we do not include any further acquisitions into our forecast, so further acquisitions represent upside risk to our estimates.

29x NTM EBITA, 4% below core peers
The share is trading at 29x NTM EV/EBITA, 4% below core peers (Addtech, Indutrade, Lifco and Sdiptech), but 94% above its five-year average. Lagercrantz’ ‘21e ND/EBITDA of 1.7x and focus on profitable growth (organic and acquired) bodes well for the company to be able to grow faster than its five-year average of 10% p.a.

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