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Elanders: Entering 2022 a changed company - ABG

Q4 report due on Thursday, 3 February
New acquisitions included in our estimates
Less cyclical, more M&A and more e-com exposure

Q4 expectations
We expect Q4 sales of SEK 3,100m, up 7.4% y-o-y (0.9% organic, 0.5% FX, 6.0% M&A). We expect a weaker quarter within the Automotive and Industrial customer segments (-3% and -4% org. growth, respectively) due to both segments being significantly affected by component shortages. Q4 is, however, always a strong quarter for Elanders, as the company’s online customised print services tend to get a Christmas boost. However, as we believe Q4’20 was boosted by more people ordering Christmas gifts from home due to the pandemic, we estimate 0% organic growth for the “Other” customer segment in Print & Packaging (where online print sales are reported). We expect adj. EBITA of SEK 274m, for a margin of 8.8% (8.9%). This includes NRIs of SEK -17m from acquisition related costs. Margins should be held back y-o-y by higher paper prices, but this is offset by the acquisition of online print company Schätzl, which will contribute to Q4 with high-margin sales.
Acquisitions added to ests., improves organic growth profile
We raise our ’21e-’23e adj. EBITA estimates by 3-7%. We make some minor adjustments to organic growth estimates, lowering Automotive sales and raising Fashion & Lifestyle sales. However, the estimate revisions mainly stem from us including the acquisitions of Bergen (consolidated mid-Nov) and Eijgenhuijsen (consolidated 1 Dec) in our estimates, which we also see improving Elanders’ organic growth profile.
A year of change: less cyclical, more M&A, and more e-com
On our estimates, the share is currently trading at 11x ’22e EV/EBITA (adj.). Also, we would like to highlight that Elanders, in our view, is entering 2022 as a changed company. Elanders today 1) is less cyclical as it is less dependent on Automotive and Industrial customers, 2) has picked up its M&A pace during H2’21 and, 3) has increased its exposure towards e-commerc
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