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Vitec: Margin miss driven by higher costs - ABG

8% organic growth (cons 8%) and in line sales… …while higher costs caused ~20% adj. EBITA miss Consensus estimates to come down mid-single digit Q2 details
Sales SEK 449m (-1% vs ABGSC 453m, -1% vs cons 454m), adj. EBITA 120m (-16% vs ABGSC 143m, -23% vs cons 156m), EPS SEK 1.52 (-21% vs ABG 1.92, -19% vs cons 1.88).

A cost driven margin miss Organic growth in recurring revenues 8% (vs ABG 7%, cons 8%) driven by positive price adjustments, while increased costs (salaries and travel) caused the margin miss. On an H1 basis, the profitability is solid and is likely explained by a somewhat stronger than normal Q1 and somewhat weaker than normal Q2. We expect to see increased travelling expenses and salary inflation ahead, although not material.

Estimates slightly down on the margin miss Vitec reiterates a positive view on continued M&A activity and opportunities. We expect consensus to reduce estimates by mid-single digit on the margin miss, and share should underperform the market around the same level. No conf call.

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