For the first time since Q1’18, we expect double-digit organic sales growth (15%) for Alcadon in Q1’22e, primarily driven by a strong Danish market. Additionally, we expect a smaller acquisition contribution from Belgium of 6%. To sum up, we estimate sales of SEK 207m, up 22% y-o-y. Because Denmark and Germany have lower gross margins and are becoming a larger share of total sales, as well as cost inflation where price increases normally occur with a time lag of 1-3 months, we expect the gross margin to decline by 2.4 pp y-o-y to 26.5%. At the same time, we expect opex to remain elevated at SEK -38m, on par with Q4’21, given Alcadon’s ramp-up in Germany. All in all, we expect adj. EBIT of SEK 14m for a margin of 6.6% (10.4%), and see profitability improving gradually during the year, as “planned” opex (recruitment and product development mainly) start to generate incremental sales volumes.
25% ’21-‘24e EBIT CAGR
We lower ‘22e adj. EBIT by 4% on continued cost inflation, pressuring margins. In conjunction with the Q4’21 report, management announced that delivery to Deutsche Glasfaser (DG), with an order value of SEK ~200m p.a., will start during the summer at the earliest. We expect the delays (planned start in Q4’21) to be caused by pandemic-related sick leave at both DG as well as Alcadon in Germany. We currently expect deliveries to commence in late Q2 (in line with guidance) for a full ramp-up in Q3. As such, the ramp-up in Germany will be tilted towards H2’22, as will sales and EBIT contributions to the FY’22e results. Despite some short-term challenges, we forecast a 25% ’21-‘24e EBIT CAGR underpinned by strong underlying market growth driven by FTTH and the 5G roll-out, data centre projects, increasing EV penetration etc.
M&A still a key focus, enabled by net cash position
The share is trading at 13x ‘23e EV/EBIT. Given the company’s ‘22e net cash ...
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