Organic sales growth of 10.5% vs. ABGSCe of 5.7% Temporary gross margin pressure in H2’22e… …but optimistic signs of a return to M&A Good organic growth and order intake, but soft OCF Activity in CBTT’s market remains good, illustrated by 10.5% organic sales growth and the R12m book-to-bill increasing to 1.05 in Q2 ’22 (1.03 in Q1’22). Sales were SEK 214m, up 15% y-o-y. The adj. EBITA margin improved by 1.1 pp y-o-y, resulting in a 45% y-o-y growth to SEK 11.6m, below our expectations of SEK 15m. The EBITA was burdened by costs incurred in connection with an investment in a new ERP system, although the amount was undisclosed. Given the strong order backlog and constraints in supply chains, management has intentionally during the quarter built a larger inventory, now 14% of R12m sales (~9% L5Y avg). Consequently, operating cash flow was soft in Q2 at SEK -3.5m (adjusting for payments of earn-outs included in NWC), compared to SEK 16.5m in Q2’21.
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