53% ’22e-‘24e adj. EBIT CAGR
Nordic countries showing the way
For Q3, we expect sales of SEK 268m, up 47% y-o-y (13% org, 31% M&A and 3% FX). We expect the organic growth to be driven by the Nordic countries (particularly Denmark) while Germany continues to struggle with component shortages, hampering growth. According to the German Ifo Institute, material shortages were at their worst during the end of Q3 in Germany, thus the hoped-for easing seems to have failed to materialise, for now. With Alcadon’s relatively high exposure towards USD in input material purchases, we expect the 7% q-o-q rise in USD/SEK to have put pressure on the gross margin and canceled out any price increases since Q2. We expect a GM of 26% (-2.8pp y-o-y, flat q-o-q). Combined with the continued planned build-up of opex, we estimate adj. EBIT (adj. for acquisition cost of ABGSCe SEK 2m) of SEK 17m, down 2% y-o-y for a margin of 6.3% (9.5%). Lastly, we expect continued NWC build-up to hurt operating cash flows, as in H1’22.
‘22e adj. EBIT down 15% on FX and component shortage
We have lowered our ‘22e adj. EBIT estimates by 15% on continued headwinds from component shortages and currencies, whereas our estimates for ’23e-‘24e are fairly intact. All in all, we expect a ’22e-‘24e sales CAGR of 30% (13% org., 17% M&A) and adj. EBIT CAGR of 53% for the same period. We expect the adj. EBIT margin to increase from 6.5% in ‘22e to 9.0% by ‘24e, driven by price increases catching up with cost increases and scale (volumes are set to catch up with planned opex increases). Although Alcadon’s ‘23e ND/EBITDA of 2.7x is close to its upper boundary (financial target of 2-3x), we see that additional acquisitions could add to our estimates.
14-11x ’23-‘24e EV/EBIT
The share is down 40% YTD and is trading at 14-11x ’23-‘24e EV/EBIT on our updated estimates. We keep our fair value range of SEK 90-100, corresponding to 16-18x ‘23e EV/EBIT.
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