Nordic Waterproofing: Solid margins despite headwinds

Nordic Waterproofing: Solid margins despite headwinds - ABG

Adj. EBIT 6% below ABGSCe
Demand stable at high levels
14x ‘22e EV/EBITA, 5% ’22-23e lease adj. FCF yield

Sales were slightly below our expectations at SEK 1,003m (-4% vs. ABGSCe 1,043m), up 10% y-o-y whereof 1% was organic. The 1% org. growth was the result of +4% in Products & Solutions, all due to sales price increases, as well as -8% in Installation Services in Finland. The latter was mainly caused by delays on job sites due to component shortages, and a disciplined approach towards not accepting lower-margin business. Adj. EBIT was SEK 140m (-6% vs. ABGSCe 149m), corresponding to a margin of 14.0% (ABGSCe 14.3%). The positive development y-o-y is explained by the implementation of NWG’s turnaround plan in the Prefabricated Elements business. However, dramatic increases in input prices have had a negative effect on both business segments. In Products & Solutions, NWG is in the process of absorbing these through a series of sales price increases, albeit with a time lag of several weeks. Management explained that the situation in Installation Services has not worsened, but it could take a few months before the situation improves.

NWG has delivered 19% EBITA CAGR ’12-’20, with 100% avg. FCF conversion and 15% avg. ROCE from operations relatively insulated from cyclical fluctuations. NWG is trading at 14x ’22e EV/EBITA, and we believe that it can sustainably deliver >10% EBITA growth with M&A.

Nordic Waterproofing: Solid margins despite headwinds - ABG

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Börsläget den 10 december, 2024

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Nordic Waterproofing: Solid margins despite headwinds - ABG

Agnes Michanek pekar ut vägen framåt

Börsläget den 10 december, 2024

Streaming-tv – en katalysator för framtidens digitala annonsering

Investera i framtidens kopparproduktion – Adak-projektet

Nytt nummer ute nu! Läs Magazine Börsvärlden HÄR

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Agnes Michanek pekar ut vägen framåt

Börsläget den 10 december, 2024

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