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Nilörngruppen: Looks set for a stylish year-end - ABG

Q4 results due on February 11 We expect sales of SEK 183m and EBIT of SEK 20m Share trading at EV/EBIT 9x-9.6x in ‘21e-‘23e

Q4 expectations Niloerngruppen (Niloern) reports its Q4 results on February 11. We expect Niloern to have continued its growth from Q3 into Q4, which seasonally is a strong quarter for the group. We note that clothing sales statistics in major markets have continued to be strong, which should provide support to the group. More specifically, we expect sports and e-commerce to remain the core drivers, although we forecast a slight upswing in brick-and-mortar stores. Furthermore, we anticipate Niloern, like many other companies, to have continued experiencing challenges related to raw material and freight cost inflation, which might hamper its short-term margins. Further ahead, however, we believe Niloern is likely to offset these through price hikes. In sum, we expect Niloern to have grown sales for the quarter by 5% y-o-y to SEK 183m. Additionally, we forecast EBIT of SEK 20m, yielding a margin of 11.1% (-1.2pp y-o-y, but +4.3pp vs 2019). In terms of the gross margin, we pencil in a slight contraction q-o-q, but an expansion of 1.4pp y-o-y supported by increased efficiency in the production plants. Cautiously positive outlook into 2022e On the back of the above, we raise our ‘21e sales and EBIT by 1% and 4%, respectively. Looking into ‘22e we remain cautiously positive, nevertheless considering that we are yet to see the extent of the customer loss from Q3’21, which we expect to become visible in H1’22e. As such, and due to FX effects, we trim our EBIT estimates for ‘22e-‘23e by 1.5-1%, and simultaneously pencil in an incremental gross margin contraction. Share is trading at EV/EBIT 9x-9.6x in ‘21e-‘23e On our updated estimates, the Niloern share is trading at an EV/EBIT and P/E of 9x-9.6x and 13x-14.3x in ‘21e-‘23e, respectively. For comparison, this is well below its significantly larger peer Avery Dennison, which is trading at a forward-looking EV/ ... Läs mer på Introduce
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