Despite a quarter characterized by cost inflation, component shortages and high levels of sick-leave, Stockwik navigated rather well through Q1. Sales were in line with our estimates at SEK 150m, up 27% y-o-y, mainly driven by acquisitions. The gross margin increased to 63.4% (60.3%), however we expect the 3.1pp increase to mainly be driven by a different cost structure (less cogs, more opex) in acquired companies. The adj. EBITA margin came in at 9.0% (6.6%) vs. our expectations of 7.4%, leading to an estimate beat on adj. EBITA of 22%. All in all, adj. EBITA grew 73% y-o-y. Management highlights that the ongoing Russian invasion of Ukraine risks disrupting supply chains in the Industry segment (32% of ‘22e sales and 34% of EBITDA), thus the segment is building up a large inventory in order to secure deliveries of tires later in the year. Despite this, the change in NWC was positive at SEK 14m in the quarter leading to strong operating cash flow of SEK 18m (6m). ND/EBITDA was 3.8x in Q1, or 3.1x pro forma, a level that management says it is comfortable with. Following the two latest acquisitions, we estimate a ‘22e ND/EBITDA of 2.9x.
Estimates up 9-7% on beat and M&A
Following the estimate beat and the inclusion of the latest two acquisitions (Anders & Peters Däckservice and Trainparts Sweden) we raise our ‘22e-‘24e adj. EBITA by 9-7%. However, our EPS comes down slightly due to increased interest costs following the tap issue of SEK 75m in Q2’22. If Stockwik expands its ‘22e ND/EBITDA to 4.0x (3.2x pf), it has acquisition headroom to add 24% to our ‘22 adj. EBITA estimates with the current balance sheet.
12-9x ‘22e-‘23e EV/EBITA
The share trades at 12x and 9x EV/EBITA on our updated estimates for ‘22e and ‘23e, respectively, relatively in line with its closest peer Seafire on ‘23e multiplies. YTD, Stockwik has made thre ...
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