Muted growth in Q2 before acceleration in H2'24
We forecast a stable Q2 with SEK 3,205m sales for 1% growth y-o-y, whereof 1% from M&A. The growth represents a slowdown compared to 5% in Q1, where M&A comprised 3%. Breaking down the 0% organic growth, we see 0% growth in Sweden, in line with the average of recent quarters where solid underlying growth offsetts the decline from the Ericsson contract. From September, Coor will be fully transitioned out of the Ericsson comps, at which point we see organic growth improving to 3-4%. Meanwhile, we see potential for maintained strong growth in Norway (8% organic), in part because of more normalised variable volumes which were lower last year. We still see Denmark as a growth market, but we expect the lost contracts in Q1 to continue to weigh on growth in Q2 for -5% growth overall. Turning to profitability, we expect stable margins in Sweden and Norway y-o-y while we expect a slight increase in Denmark (4.9% versus 4.5% last year). However, the margin expansion is offset by an increase in central costs. This increase comes from centralisation of costs (part of the harmonisation program). This will weigh on profitability until the synergies are fully realised in local markets over the coming quarters.
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