Encouraging demand improvement despite Q3 miss
Q3 adj. EBITA came in 9% below ABGSCe and 4% below FactSet consensus, mainly driven by a lower margin in Supply Chain Solutions (SCS) and lower sales in Print & Packaging (PPS). While SCS posted solid organic growth of 5%, the 7.2% adj. EBITA margin (ABGSCe 7.4%, consensus 7.8%) was disappointing. Apart from Electronics, which continued to experience good demand, and Other, most customer segments missed our expectations. The North American market remained weak while demand improved in Europe, and Asia stabilised. PPS saw negative organic growth, causing the margin (4.9% vs. ABGSCe 6.5%) to miss expectations. While Elanders still cites high uncertainty, we were encouraged by the maintained outlook of a continued gradual demand improvement. The reevaluation of the Kammac earnout had a positive effect on reported earnings. While it is negative that Kammac has not lived up to 2024 expectations, we find this positive as the outlook is improving. OPCF at SEK 279m amid higher NWC was disappointing but was due to higher growth. ND/EBITDA of 3.7x was on the high side, but we are not too concerned.
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