As pre-announced by the company, Q4’21 was soft. Delayed projects due to component shortages and supply chain issues weighted on sales. However, CBTT said that orders have not been lost, just pushed back to later in ’22, although it did say that longer lead and delivery times continue to affect the business. Additionally, a negative product mix with lower gross margins, mainly due to the delivery for a project in China with a low margin (Process & Environment segment) reduced the margin y-o-y. All in all, sales were SEK 193m (-7% vs ABGSCe), -1.3% y-o-y, of which -7.6% was organic. Adj. EBITA was SEK 3m, in line with the pre-announced figures, corresponding to an adj. EBITA margin of 1.6%. On the positive side, order intake remained strong for the third consecutive quarter, up 22% y-o-y. Lastly, the proposed dividend is SEK 0.75 per share.
‘22e-‘23e adj. EBITA est. down 11-6%, respectively
We lower ‘22e-‘23e sales and adj. EBITA by -4-5% and -11-6%, respectively, following the estimate miss and cautious guidance for H1’22. In conjunction with the report, it was announced that the new CEO, Caroline Reuterskiöld (previously business area manager within Lagercrantz’s Niche Products division), would join the company on 28 April, 2022. After this, a permanent CFO will be recruited. Due to the transition of management in H1’22, we expect to see little M&A activity this year. However, with Ms Reuterskiöld’s experience from Lagercrantz, we expect acquisitions to be made more frequently in the longer term, compared to CBTT’s historical average of one per year.
9.5x ‘22e EV/EBITA
The share is trading at 9.5x ‘22e EV/EBITA and we forecast a 24% ‘21-‘24e adj. EBITA CAGR. We lower our fair value range to SEK 27-37 (30-52) following lower estimates and lower peer multiplies. Our updated fair value range corresponds to 10-13x ‘22e EV/EBITA.
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