Relais: Strong start for the year supported by cold weather conditions - Nordea

Relais reported Q1 adjusted EBITA of EUR 9.7m, 13% above LSEG Data & Analytics consensus. Organic sales growth was 12% y/y in Q1, clearly above our expectation of 3%. Net sales were EUR 82.8m (up 20% y/y), 8% above consensus expectations. FX did not have impact on EBITA level. Q1 benefited from cold weather conditions in the Nordics while we note all product groups beat our sales estimates. Sales increased 22% y/y in Scandinavia and 17% y/y in Finland-Baltics. Gross margin came 40bp above consensus expectations and was down 40bp y/y to 46.2%. EPS of EUR 0.21 came slightly below consensus expectation of EUR 0.22, burdened by negative exchange rate differences related to SEK denominated interest-bearing loans and internal loan receivables, and taxes. Operating cash flow declined y/y as expected and was EUR 4.6m (EUR 11m a year ago, supported by net working capital) while leverage decreased to 3.2x from 3.5x at year-end. Inventories were down 1% y/y despite acquisitions and growth related investments in Lighting inventories. Relais does not give short-term outlook for 2024. On initial take, we believe consensus to hike 2024E-26E EBITA by some mid-single digits.