Lagercrantz delivered another solid report. Sales were SEK 1,405 (+7% vs. ABGSCe at 1,314m and +4% vs. Infront consensus of 1,348m), up 30% y-o-y, of which 14% was organic (ABGSCe at 10%). Notably, this was 1pp higher organic growth q-o-q despite tougher comps (-5% vs. -1%). Management said in October demand was on a par with Q2’21/22 and increased slightly in Nov-Dec. Also, Lagercrantz has continued to increase prices, supporting organic growth. Adj. EBITA was SEK 226m (+7% vs ABGSCe 211m, +4% vs. consensus 218m), on a margin of 16.1% (ABGSCe 16.0%, consensus 16.2%) vs. 15.6% in Q3’21/22. 3 out of 5 segments improved margins y-o-y, whereas Electrify and TecSec’s margins decreased slightly y-o-y due to cost inflation (metals mainly), not fully offset by price increases. However, management says prices are being increased to fully offset this. Lastly, OCF was somewhat weak due to inventory build-up.
Estimates up 4-2%, solid outlook for H1’22
After the estimate beat, we raise ‘21/22-‘23/24e adj. EBITA by 4-2%. Management was clearly upbeat about the near term. Incoming orders remain at a good level and the company has effectively handled rising raw material and freight costs and component shortages through price adjustments and creativity. Management, however, noted increased sick leave in Q4’21/22 due to Omicron, but it highlighted that it had little impact on the operations.
Multiple contraction continues, now 25x NTM adj. EV/EBITA
The share is down 23% YTD vs. peers at -20% and is trading at ~25x f12m adj. EV/EBITA (25% below peak in Dec’21, but 35% above the L5Y avg.), in line with the peer group but 7% below Addtech (L5Y average/median f12m adj. EV/EBITA in line for the two companies).
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