Alcadon: Big in Germany (soon) – ABG

Adj. EBIT 13% better than ABGSCe
Deliveries in Germany have started
Trading at 14x f12m adj. EV/EBIT

Q4 results
Alcadon delivered sales in line with expectations at SEK 205m, up 21% y-o-y whereof 15% organically (ABGSCe 15%, cons 14%). The organic growth was driven by Sweden (+19% y-o-y) and Denmark (+24%), whereas Norway where flat y-o-y and Germany decreased 36% y-o-y. Management repeats guidance for delivery starts of larger orders (Deutsche Glasfaser and Emtelle) in Q2 and mentions that it has already started in small-scale, something that will drive the organic growth in the German market going ahead. Gross margin held up well in the quarter at 28.3% (28.9%), better than our expectations at 26.5%, driven by continued price increases towards customers. Consequently, adj. EBIT came in 13% better than our expectations, at SEK 15.5m, corresponding to a margin of 7.6% (10.4%).

Estimate changes and outlook
Given the estimate beat in the quarter, we expect cons. est. to come up with ~2%. Besides the postive reinforcement of delivery starts in Germany, management also guide for an improved margin going ahead (ABGSCe 9.5% in Q2’22). Lastly, management highlights that a number of “interesting” acquisitions dialogues are ongoing and mentions that M&A is a highly prioritised growth strategy.

Final thoughts
The share is down 35% YTD (vs. OMXSPI -15%) and trades at 14x f12m adj. EV/EBIT, down from peak 21x in Dec’21.

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