Niloerngruppen finished the year on a high note, growing Q4 sales by 35% y-o-y to SEK 234m (+28% vs. ABGSCe of 183m). The growth was driven by higher volumes from: 1) continued tailwinds in sports and e-commerce customers, 2) an upswing among retail customers on eased pandemic restrictions, and 3) previous investments in production capacity in Portugal paying off. Despite continued challenges related to increased freight costs and input material cost inflation, Niloern managed to maintain a stable gross margin of 45.4% (+1.3pp y-o-y, -0.1pp vs. ABGSCe). Even more impressive was the smooth drop-through from top-line to EBIT, which yielded an impressive margin expansion of 4.9pp y-o-y to 17.1% for EBIT of SEK 40m. The Q4 report confirms that FY’21 was a strong bounce-back year, with sales growing 28% y-o-y to SEK 788m (824m incl. currency adjustments), including org. growth of 33%, resulting in a record margin of 15.2%.
Outlook 2022e: some clouds on the horizon
As communicated in conjunction with the Q3 report, Niloern has lost a couple of large customers, which we estimate will become visible in H1’22e. Despite this, we note that the order intake in Q4’21 showed a continued positive trend, adding confidence into ‘22e. That said, it is difficult to assess how well Niloern will be able to compensate for this loss, and we consequently retain our cautiously positive outlook into ‘22e. We forecast a slight gross margin contraction as well as more normalised operating margins on a higher cost base following personnel recruitment in H2’21. Lastly, we raise our ‘22-23e sales and EBIT estimates by 6% and 3-6%, respectively, mainly due to Q4 deviations.
Share trading at EV/EBIT adj. of 11x-8.5x in ‘22e-‘24e
On our updated estimates, the Niloern share is trading at EV/EBIT adj. of 11x-8.5x in ‘22e-‘24e.
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