Q3 20 review. Revenue declined 34% y/y due to low order intake from previous quarters and postponements of orders. Orders declined by 46% y/y and the order book was 40% lower y/y. The EBITA margin declined to 3.6% from 5.7% year-ago and adjusted EBIT was in line with our estimates, despite lower revenues. Glaston’s fixed costs were lower and synergies from the Bystronic acquisition helped. Net debt / EBITDA has increased to c. 3x, but Glaston has negotiated higher covenants and postponed debt repayments with its banks, so new equity is probably not needed.
Estimate changes. We have cut 2020E adjusted EBIT by 14% and 2021E by 2%. We have cut estimates for HT and Automotive, but increased IG. We expect flat sales in 2021E with HT still down y/y, but EBITA margin increasing compared to 2020E.
Valuation. The share has underperformed (-44% 12M). Valuation on EV/sales is low at just 0.5x 2020E, indicating 58% discount to the Nordic capital goods peers’ median (1.2x) and 41% discount to the lowest-valued stock in the peer group (Cargotec: 0.8x). We maintain our 12M fair value range of EUR 0.60-0.80 per share.
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