Thoughts and outlook
Overall, the report was better than we expected. While sales was ~2% lower than expected, the earnings beat shows that the company successfully controls costs. Overall, we believe that this report could serve as a data point that indicates that topline has bottomed. Yesterday, the company announced a cost savings programme that is planned to launch in Q3'23e, and is estimated to yield annual run-rate savings of SEK 30m, with SEK 7m being realised already in '23e. While we believe that consensus has already incorporated some opex savings in the unrevised estimates, we believe that these measures could sustainably improve profitability. Overall, we are optimistic on the long-term prospects for the various business areas, despite near-term cyclical, consumer-related headwinds.
Valuation and estimate revisions
The share is down ~80% YTD, and is trading at ‘23e-'24e EV/EBIT of 34-10x based on our unrevised estimates. Based on mechanical calculations following the report, we anticipate consensus to raise '24e-'25e EBIT estimates by low single-digits.Deviation tableSource: ABG Sundal Collier, Company data.
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