Seafire: High growth and improving margins

Seafire: High growth and improving margins - ABG

Q4 report due Thursday 24 February Solid M&A pipeline going into ’22 12.9x ’22e EV/EBITA, 20% ’21e-’23e adj. EBITA CAGR

Q4 expectations: Ends with a bang We expect Q4 to be a solid end to ’21 for Seafire, with sales of SEK 119m, up 147% y-o-y (5% organic, 142% M&A), supported by the four latest acquisitions. We estimate an adj. EBITA of SEK 10m, corresponding to an adj. EBITA margin of 9% (-2%). The y-o-y margin increase of 11pp is due to the acquisitions in the Industry segment, increasing the segment’s share of total sales (from 16% in ’20 to 47% in ’21e), thereby reducing the overall seasonality for Seafire as well as being margin accretive. Profitability is still slightly dampened by high freight prices and cost inflation, however, as in Q3. Estimates relatively intact In absolute terms, we leave our estimates relatively intact but lower ’21e adj. EBITA by ~SEK 2m. Additionally, we increase ’21e-’23e net financials due to the bond issue of SEK 100m in Q4. Overall, we expect ’21e-’23e sales and adj. EBITA CAGRs of 20% and 42%, respectively. Seafire has an acquisition target of 4-6 companies p.a. vs. its 3-year average of two companies annually. However, ’21 was a record year with four completed acquisitions, indicating an increase in momentum. We expect the high acquisition pace to continue in ’22 for three reasons: 1) a strengthened management team, facilitating parallel M&A processes, 2) strong deal flow, with ~50% of the acquisition targets being sourced in-house, and 3) solid M&A headroom, with a ’21e cash position of SEK 254m and ND/lease adj. EBITDA of 2.2x. We do not include further acquisitions in our estimates, however, leaving room for Seafire to add to our estimates through additional M&A. 12.9x ’22e EV/EBITA, ~10% below core peers On our estimates, Seafire trades at ~12.9x ’22e EV/EBITA, 10% below core peers while offering double expected earnings growth for ’20-’23e and comparable profitability. Läs mer på Introduce

Seafire: High growth and improving margins - ABG

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Börsläget den 10 december, 2024

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Seafire: High growth and improving margins - ABG

Agnes Michanek pekar ut vägen framåt

Börsläget den 10 december, 2024

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