Traditional important markets now drive results
Raute’s guidance remains unchanged. Employee costs should stabilize going forward and we also believe other expenses have now peaked. The big order book will thus begin to drive higher profitability. Raute sees potential supply chain challenges in H2, but in our view components and logistics issues are not a major long-term topic in the context of Raute considering the company’s strong value chain position. We make only small estimate revisions. We see Raute reaching EUR 163m in FY ‘22 revenue with a 6.5% EBIT margin, whereas we previously estimated a 7% margin, and further potential from there on.
Valuation is not stretched given the long-term potential
We continue to expect steep earnings climb for FY ’22. We make a small moderation in our profitability estimates, on which Raute now trades some 8x EV/EBITDA and 10x EV/EBIT; we see the FY ‘23 multiples contracting to about 7x and 9x. In our view these are attractive levels considering Raute’s leading position in advanced markets as well as long-term emerging markets opportunities. We retain our EUR 26.5 TP and BUY rating.
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