Ramp up of deliveries in Germany during H2’22
Q2 results
Alcadon delivered sales of SEK 216m (-2% vs ABGSCe 220m, 0% vs. cons 216m), up 22% y-o-y of which 14% organically (ABGSCe 15%, cons 14%). The organic growth was driven by Norway and Denmark, whereas Sweden was flat y-o-y and Germany slightly down. Adj. EBIT was on the softer side at SEK 10m (-22% vs ABGSCe 13m, -14% vs. cons 12m), corresponding to an adj. EBIT margin of 4.8% (9.7%) vs. ABGSCe 6.0% and cons 5.5%. The result is mainly burden by increased overheads due to Alcadon’s growth efforts. Additionally, negative development in exchange rates impacted EBIT with SEK -3.2m.
Estimate changes and outlook
Cons. ‘22e estimates likely to come down 4% on the estimate miss. However, the acquisition of NWC announced 10 August will add ~50% and ~40% to ‘23e consensus sales and EBIT estimates, respectively. Thus, we expect to see substantial positive estimate revisions after the report when NWC is included into estimates. On the outlook, management says continued disruptions in supply chains will likely hold back sales in the near future as well, but a healthy pipeline of projects points towards continued positive development in the months to come. Additionally, management sees signs of stabilisation in cost inflation and expects gross margins to strengthen as prices increases catches up going ahead.
Final thoughts
Although the focus now has shifted slighly from the ramp up in Germany to the acquisition of NWC in UK, we find it positive that deliveries have commenced to Emtelle and Deutche Glasfaser in Germany, although still on a small scale. Management says the intention is to ramp up deliveries over H2’22, something that will support the organic growth going forward.
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