Swedencare: Margin bounce back in line with guidance - ABG

Sales 6% vs. ABG 5% vs. con Adj. EBITDA 8% vs. ABG 16% vs. cons. Cons. estimates to come up by ~2-4% Strong sales in Q1 report Swedencare’s Q1 results were stronger than consensus expectations. Sales grew by 7% organically to SEK 378m, which was 6% ahead of our expectations at SEK 357m and 5% vs. Bloomberg consensus at SEK 361m. Management states that while the macroeconomic uncertainties in February made customers hesitant to place larger orders, end-consumer demand remained strong. Towards the end of the quarter, the company saw a stronger order demand, ending with a strong momentum. Margin bounced back in line with guidance In Q4, we remember management guided for a steep margin bounce-back to >25% EBITDA margin again. This was pre-war and the increased cost inflation it implied. Hence, Bloomberg cons. expectations went into the quarter with expectations of an EBITDA margin of 22.6%. The company has experienced cost inflation, which has successfully been compensated with price hikes. The Q1 adj. EBITDA margin came in at 25% for an adj. EBITDA of SEK 95m, 8% stronger than our expectations and 16% vs. cons. Adj. EBITA (operational EBIT by company definition) came in at SEK 75m, -3% vs. our estimates at SEK 77m. We expect cons. estimates to come up by 2-4% On the back of the Q1 report, we would expect cons. estimates to come up by some 2-4%. Note that Q1 is likely to be the smallest quarter of FY’22, with Naturvet and Innovet being fully consolidated in the company’s financials by Q2. The company will host a conf. call at 10:00 CEST. Link: https://swedencare.webinargeek.com/swedencare-live-presentation-of-q1-report-with-q-a/join/28lxerlb Läs mer på ABG Sundal Collier