Q3 details
Good performance in Finland/Rest of EU while margins in Sweden continue to be under pressure, resulting in larger than expected organic margin pressure. Sales grew 22% y-o-y to SEK 1,430m (-1% vs. ABGSCe, +2% vs. FactSet cons.) and 0% organically (ABGSCe/cons 3%, 4% Q2'23), with sales in Sweden below ABGSCe and Finland/Rest of EU above ABGSCe. EBITA adj. for acquisition-related items grew 36% y-o-y to SEK 129m (-3% vs. ABGSCe, +6% vs. cons), for a margin of 9.0% (ABGSCe 9.3%, cons 8.7%, 8.1% Q3'22). We estimate that organic adj. EBITA was down 19% (ABGSCe +1%) while FCF was, as expected given seasonality, negative (neg. ~80m, ~10% of adj. EBITA in Q2'23). Sweden and Norway had lower margins vs. ABGSCe, which were partly offset by continued very strong profitability in Finland/Rest of EU (25% vs. ABGSCe 17%). R12m gearing came down q-o-q to 2.9x (3.1x Q2'23) and 2.7x excl. earn-outs (2.8x), and was stable q-o-q pro forma (2.4x). According to management, Q3 started on a cautious note but normalised mid-Q3, and that delayed project starts and certain company-specific events held back performance in Sweden. In addition, the CEO also notes that competition continues to pick up. We note that it is now the second quarter where company-specific challenges have held back margins in Sweden, so key will be to understand how long this will prevail.
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