Stable market, strong profitability
We expect market conditions to have remained stable during Q3, but that tougher comparables will yield organic sales of 3% (vs. 4% in Q2'23). This combined with recent M&A should yield group sales of SEK 1,442m, up 23% y-o-y. Looking ahead, we expect the high share of public customers (60-70% of sales) to mitigate the weaker activity seen in Nordic construction and installation and yield 1% organic growth in Q4 as well. Profitability will remain strong, in our view, supported by positive organic EBITA (1%) growth as well as margin-accretive M&A, and yield an adj. EBITA of SEK 133m, up 40% y-o-y, for a margin of 9.3% (8.1% Q3'22, 9.4% Q2'23), divided into 7.0% (4.6%) for Sweden, 10.4% (12.3%) for Norway and 17.0% (12.9%) for Finland/Rest of EU. Finally, we believe that seasonally negative working capital changes could partly hold back the ongoing improvement in cash conversion (R12m FCF/EBITA was ~60%), before improving again in Q4 and yielding a ND/EBITDA (ex earn-outs) 2.2x by YE'23e.
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