Seafire: Continues on its high-growth path - ABG

Q2 report due Tuesday, 23 August
We expect 167% adj. EBITA growth in Q2e ’22e-’24e net profit down 23-4% on higher interest expenses Price increases in support of organic growth We expect Seafire to deliver another quarter of high growth, with sales of SEK 236m, up 125% y-o-y (16% organic and 109% M&A). In conjunction with its Q1 report (27 April), management said that Q2 had started strongly, something we expect has held true for the remainder of the quarter, with solid volume growth. Additionally, we expect continued price increases to add to the organic growth. We estimate an adj. EBITA of SEK 32m, up 167% y-o-y, for a margin of 13.4% (11.3%), with the y-o-y expansion mainly driven by margin-accretive acquisitions. We anticipate component shortages and cost inflation to remain challenging, but note that the situation has gradually improved. Although Seafire has been actively fighting off cost inflation with price increases we expect to see a continued lag in Q2, due to some prices being adjusted according to indices, resulting in a time lag.