Q3e sales and adj. EBITA of SEK 230m and 23m

F12m EV/EBITA down from 12.9x in Dec ’21 to 7.6x now

Refinancing of debt in ‘23e could lift estimates

H2’22e looks solid
Following a strong Q2, we expect somewhat lower sales of SEK 230m in Q3 due to July being a seasonally slow month for the company. Nevertheless, this still represents a significant increase

Small changes to estimates
We increase our ‘22e-‘24e sales estimates by 4-5% due to price increases, and reduce our adj. EBITA estimate for ‘22e by 5% as a result of fine-tuned Q3 expectations. Adj. EBITA estimates for ‘23e-‘24e remain unchanged. Net profit estimates are down 18-7% following higher interest expenses on the SEK 600m variable rate bond. Looking ahead, we forecast a 40% ’21-‘24e adj. EBITA (per share) CAGR.

Valuation down, ests. up – refinancing could lift ests. further
From Dec ’21 until today, Seafire’s f12m EV/EBITA multiple has decreased from 12.9x to 7.6x (-41%), while we have raised our ‘23e adj. EBITA (per share) estimates by 39% during the same period. In ‘23e, Seafire has the possibility to call its outstanding bond and possibly reduce its interest expenses. For example, if Seafire were to bisect its interest rate from current levels, ‘24e net profit would increase by 43%, FCF by 24%, the cash conversion would improve 16 pp to 72%, and the P/E would decline to 8.7x. See more on pages 3-4 for our refinancing scenario analysis.

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