For the Q1 report due on 28 April, we expect external factors to hold back the results. Firstly, we expect the B2C sales for DistIT to be negatively affected by the increased inflation in Q1 (a rise of 4-6% y-o-y from Jan-Mar, according to SCB). Moreover, we expect GM pressure due to: 1) FX headwinds on the 11% y-o-y rise in USD, DistIT’s main currency for its own brands, 2) continued high freight rates and 3) the previous inventory build-up, which instead of being supportive will likely lead to products being sold at a discount to lower inventory. The company is continuously adjusting prices for the higher input and logistics costs, but we do not expect this to have fully reached customers in Q1. Although we expect 10% y-o-y growth of own brand sales, we expect freight rates and FX to offset this on the EBIT margin level.
We lower sales by 4% and estimate an EBIT margin of 2% in Q1
On the back of the above, we lower sales in H1’22, mainly for Aurora Deltaco. This leads to a 1.6% decline in our 2022 group estimates. We lower EBIT for Q1e and Q2e by 45% and 26%, respectively, resulting in a 13% negative effect on FY’22e. In summary, we expect Q1’22 group sales and EBIT of SEK 596m and 12m, respectively.
H1’22e to be characterised by negative external factors
We expect the beginning of 2022 to be impacted by the uncertainty surrounding supply chain disruptions and rising cost inflation. Moreover, we expect the focus will be to realise synergies and strengthen growth efforts for Efuel. This could likely elevate the cost base in the near term, but bear fruit in the longer term. Last week, the company announced that Philip Gunnarsson, CFO since 2020, has chosen to leave his position for a new assignment outside the company. We do not expect this to be indicative of any negative surprises in the coming period and exp ...
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