This evening Humble Group pre-announced its preliminary Q1 numbers. It expects consolidated net sales in the range of SEK 875-925m, where the mid-point is 3% above our current estimates of SEK 871m. Furthermore, the mid-point of the adj. EBITDA range of SEK 85-95m is 12% below our estimates and entails a margin of 10%, which is below our expectations of 11.7%. On these isolated numbers, our FY’22 estimates should mechanically come up by some 2% on sales and down by mid to high single-digits on EBITDA. Note that our current estimates do not include the acquisitions announced post Humble’s Q4’21 report.
Commenting on the M&A pipeline
The release is further stating that Humble has ongoing dialogues with c. 25 potential acquisition targets which could add SEK ~5,525m in sales and 430m in EBITDA (2021 numbers). This would imply close to doubled sales from our current FY’24e estimates and would be a large steppingstone towards bringing the group to its 2025 sales target of SEK 16bn and adj. EBITA of 1.9bn. It is further said that these companies could be acquired to an average multiple of 7.5x EV/EBITDA, relatively well in line with what the group has paid historically.
Intend to carry out directed share issue of SEK 500m
Humble does also intend to carry out a directed share issue of SEK 500m in order to continue financing its ambitious M&A pipeline. Assuming a 10% discount to today’s closing price would imply a share dilution of ~13%. Our current estimates imply a YE’22e ND/EBITDA incl. earn-outs of 5.2x. Taking the share issue into consideration, the leverage would mechanically come down to ~4.1x on our unrevised estimates.
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