Sales came in at SEK 3,503m (-5% vs. ABGSCe SEK 3,681m, -4% vs. FactSet cons. 3,647m), and adj. EBITA was SEK 215m (-3% vs. ABGSCe 222m, 0% vs. cons 215m), for a margin of 6.1% (ABGSCe 6.0%, cons 5.9%), with NRI of -47m (ABGSCe -10m). Net profit was SEK 1m (ABGSCe 37m, cons 34m). On top line, all segments came in below our expectations, except for Other. The EBITA miss was driven by a lower result for Print & Packaging, while the margin in Supply Chain Solutions (6.6% vs. ABGSCe 6.0%) was clearly better than expected, especially considering that Kammac is not operating at a normalised level. Print & Packaging EBITA was SEK 41m (-22% vs. ABGSCe). On another positive note, OPCF was strong at SEK 516m (536m), implying 103% cash conversion. Lease-adj. proforma net debt/EBITDA of 3.5x was in line with our anticipated development.
Estimate changes
We expect consensus adj. EBITA to come down only slightly for 2024e. Elanders expects gradual demand improvement from existing customers and new customers alike with high activity on the sales side. We think the company is well-positioned for the eventual demand recovery, and we are optimistic about the possibilities to continue to fill overcapacity. This, together with the recent acquisitions, should lead to margin expansion.
Valuation and conference call details
On our pre-Q2 estimates, the stock is trading at 12x 2024e EBITA, and offers meaningful cumulative lease adj. FCF yield over the coming years. While the company missed expectations on most group metrics, we think the stock should up on the encouraging development in Supply Chain Solutions, as the margin clearly exceeded expectations. This, together with the positive demand outlook, implies an intact H2 outlook involving solid earnings growth. Elanders will host a conference call at 09:00 CET. Registration details and the presentation material are available on the company's IR website.
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