Elanders: Missing high margin expectations - ABG

Higher costs to handle supply chain turmoil
Elanders reported a mild quarter with disappointing margins, despite solid volumes. Sales were SEK 2,769m, with organic growth of 6% y-o-y, 4% better than ABGSCe. Automotive performed as expected, Electronics and Fashion & Lifestyle were both 8% better, Industrial 6% worse and Healthcare & Life Science a whopping 59% better. Notably, volume from the subscription boxes appears to be down c. 20% sequentially (-2% effect on group level), as Elanders customers have begun to handle third-party logistics themselves. However, this should have a minor negative effect on EBITA and a positive effect on margins. Elanders states that problems with supply chains and semiconductors has affected margins in a negative way. Hence, gross profit was SEK 383m, 7% below ABGSCe, for a margin of 13.8% (1.1pp below R12m gross margin). There was no surprise on opex, but the drop-through from gross profit led to EBITA of SEK 145m, 16% below ABGSCe.