Elanders reported Q4 sales of SEK 3,364m (+9% vs. ABGSCe 3,100m, +8% vs. FactSet consensus of 3,127m), up 17% y-o-y, of which +5% organic (ABGSCe +1%). Despite stronger sales figures, which indicate robust demand, adj. EBITA was SEK 244m (-11% vs. ABGSCe 274m, -6% vs. cons. 259m) for a margin of 7.3% (ABGSCe 8.8%, cons. 8.3%). Several factors affected the weaker margin, most notably low capacity utilisation due to irregular customer demand, higher raw material and transportation prices and a smaller Q4 boost in high-margin online print sales compared to Q4’20. In addition to guiding for continued component shortage issues in 2022, which comes as no surprise, management also state that Q1’21 has seen higher personnel expenses, as Omicron cases among staff have resulted for additional temp workers.
Near-term margins lowered, should pick up in H2’22e
We lower our ’22e adj. EBITA estimates by 3%, with the largest changes coming from Q1’22e, where we now account for the aforementioned increase in personnel expenses. Looking at ’23e, we were somewhat reassured by management’s statement during today’s conference call that they believe a 7% adj. EBITA margin is reachable by ’23e. As a result, we leave our ’23e margin estimates unchanged at 6.7% (cons. on pre-Q4 numbers was 6.8%).
A mild report, but no cause for concern
Although we lower our estimates, there is nothing in the Q4 report that gives us any major concern. We retain our view that Elanders is in an exciting phase with increasing exposure towards non-cyclical customer segments, which we argue also improves the organic growth profile. Moreover, on our estimates, Elanders has M&A headroom of ~SEK 1bn in ’22e and our view is that the company will likely continue the M&A agenda that accelerated in H2’21. The share is currently trading at
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