Relais: Strong Q1 – repair and maintenance was the main growth driver - Nordea

Relais reported Q1 adjusted EBITA of EUR 7.6m, 23% above Refinitiv consensus and 8% above our estimate. Net sales were EUR 69m (up 11% y/y), 7% above Refinitiv consensus and our estimates. EBITA was burdened by EUR -0.1m costs related to acquisition. Q1 sales growth was driven by repair and maintenance business (+11% y/y organic growth) while technical wholesale and products business organic growth was +1% y/y in Q1. Sales increased 19% y/y in Scandinavia, while sales were up 3% y/y in Finland-Baltics, reflecting the general market conditions. On product group level, Equipment was up 13% y/y while Lighting was up 7% y/y. The company expects positive contribution from operational efficiency measure initiated last year for Q2, while the effect is likely to fade in H2. Gross margin came above expectations, likely due to good performance in Lighting and a strong organic growth in repair and maintenance. Operating cash flow improved substantially and was EUR 11m (EUR 2.4m a year ago), driven by 10% y/y (-2% q/q) decline in inventories. Working capital level has normalised. Relais does not give short-term outlook. On initial take, we believe consensus to make around 5% positive EBITA revisions for 2023E-25E.