Humble Group - Q3 beats expectations - ABG

Sales of SEK 1,354m, +12% vs ABGSCe EBITA of SEK 108m, +18% vs ABGSCe We expect cons. to make positive estimate revisions Q3’22 outcome Q3 sales came in at SEK 1,354m (+12% vs ABGSCe 1,214m), Gross profit SEK 417m (+21% vs ABGSCe 346m), adj. EBITDA SEK 140m (+36% vs ABGSCe 103m), adj. EBITA SEK 125m (+36% vs ABGSCe 92m) and EBITA SEK 108m (+18% vs ABGSCe 92m). Operating cash flow before change in NWC came in at SEK 105m, implying >1,000% growth y-o-y. Proforma sales came in at SEK 1,654m with a proforma adj. EBITA of SEK 130m. As such, 39% and 32% of the 2025 proforma sales and EBITA targets were fulfilled, on an LTM basis, respectively. Q3’22 thoughts and takeaways Humble’s Q3 report came in better than we expected with respect to both topline and profitability. The organic growth for the quarter was 18% (+8pp. vs ABGSCe 10%), implying that the M&A contribution was lower than expected. The gross margin was ~31%, which is higher than expected (+5.6pp. y-o-y and +2.3pp. vs ABGSCe 28.5%), and the adj. EBITA margin was 9.2% (-0.5pp. y-o-y and +1.7pp. vs ABGSCe 7.6%). The company highlighted that it is still adversely impacted by certain delays in price increases and high freight costs – a current trend among retailers. That said, the company is aiming to reduce costs in its businesses in the near-term. Regarding the balance sheet, the inventory level of SEK 979m is seemingly high, but we deem this positive from a longer-term point of view since it is indicative of strong demand for the company’s product offering. We expect consensus to come up Humble Group’s share is down ~60% YTD and is trading at ‘23e EV/EBITA of 8.9x on our unrevised estimates. We expect consensus estimates to come up given our first impressions of the Q3’22 report. Läs mer på ABG Sundal Collier