Svedbergs’ end-markets seem to have continued performing relatively well into Q1’22. We especially note a strong project market, while the consumer market looks to be slightly on the softer side. More specifically, Byggfakta’s ‘Byggstartsindikator’ for February indicates 12% y-o-y growth, which is just a marginal increase from the last few months. Furthermore, although uncertainty remains regarding supply chain disruptions and continued cost inflation, we believe that Svedbergs should continue showing resilience thanks to its large share of in-house production and volumes from recent successful product launches. However, we think that the gross margin in the short term could be slightly hampered as we expect the price adjustments made in Q1 to become more visible first from Q2. As a result, we estimate a slight gross margin contraction y-o-y of 0.4pp (to 43%) in Q1.
Q1 expectations
As Roper Rhodes becomes more visible in Q1, we expect it to constitute ~46% of the Q1 sales, yielding group sales of SEK 402m (92% M&A, 5.5% organic and 1.8% FX). Additionally, we pencil in an EBITA margin of 13.8%, slightly below the group’s target of 15%, where we estimate a quarterly increase in opex costs to marginally weigh on the margin. In terms of estimate revisions, we lift our ‘22e sales by 1% and ’23e-’24e by 2% and 2.5%, respectively, on the back of FX revisions. For EBITA, we raise our ‘22e-’23e estimates by 1% and 3%, respectively, as we expect Svedbergs to continue to scale well from its sales growth and operational leverage.
Mandatory public cash offer not likely to be accepted
Svedbergs’ rights issue of SEK 500m was set at a lower level than we initially anticipated, resulting in a larger amount of newly issued shares. Consequently, we lower our fair value range to SEK 47-65 (50-87), implying a ...
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