Q3’21/22 report due on 8 Feb

’21/22e adj. EBITA up 3% on lower cost assumptions

Solid M&A pipeline going into FY’22

Q3’21/22e: Strong momentum continues
For Q3’21/22e, we estimate sales of SEK 3,366m, up 17% y-o-y (7% organic, 10% M&A and 0% FX) alongside adj. EBITA of SEK 404m, corresponding to a margin of 12.0% (10.6%). We expect the strong demand in Q1-Q2’21/22 to have continued in Q3’21/22e, supporting the volume growth. Moreover, opex normalisation seems to be taking longer than we initially expected, supporting the 1.4pp y-o-y increase in margins. It is our understanding that component shortages and cost inflation remain, although we expect Addtech to offset these challenges well, as it has in previous quarters.

Estimates slightly up, on lower cost assumptions
We leave our estimates mostly unchanged but raise our adj. EBITA by 3-1% for ’21/22e-’23/24e, on lower cost assumptions. Based on current Infront Consensus, we find ourselves 3% above on Q3’21/22e adj. EBITA. For ’20/21-’23/24e we forecast an adj. EBITA CAGR of 11%, but note that our estimates exclude any further acquisitions. Management has said that its M&A pipeline is strong, so there is upside risk to our forecasts.

Trading at 29x NTM EV/EBITA, 11% above peers
The share has been weak into the numbers, following a strong end to ’21: down 19% YTD and trading at 29x NTM EV/EBITA on consensus numbers, or ~11% above core peers (Indutrade, Lagercrantz, Lifco and Sdiptech) vs. in line with peers historically, and 58% above its 5y average.

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