Sdiptech delivered a solid Q1 report, in line with our expectations on EBITA*, but -4% on the reported EBITA, due to earnout revaluations SEK (-6m) and M&A costs (SEK -4m). Organic EBITA* growth was weak, -1% y/y excluding FX (+5%), due to cost inflation, while total EBITA* was up 25% y/y due to M&A. The operating cash flow was healthy at SEK 145m (+34% y/y), including some WC build-up, and cash conversion increased to 73%. We think it is positive that cash conversion is high once again, as this has been a worry for many investors. The CEO says that the M&A pipeline is “extra strong”, and that it is set to reach its SEK 120-150m EBITA M&A target already before autumn. We think this is achievable given a financial ND/EBITDA of 1.3x in Q1. We do not expect to make any significant estimate revisions after the Q1 results.
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