Svedbergs Group: Macro outlook gradually improving - ABG
Q3 report due 25 October We forecast SEK 551m net sales, SEK 83m EBITA We reiterate fair value range of SEK 39-55
ANNONS
Market outlook clearly improving in Q3
We believe the trough for the Swedish Byggmaterialindex, house transactions and build starts might be behind us, with Byggmaterialindex and house transaction indicators growing y-o-y (July +1%, +9% in Q2 respectively). As such, we expect sales declines to be smaller sequentially in Q3. We look for -15% organic growth y-o-y for the Svedbergs brand vs. -22% in Q2. In the UK, softer market data from CPA mean that we forecast a sequentially flat org. growth of 6% y-o-y in Q3 despite an easier growth comp. At the group level, this translates into +1% organic growth for net sales of SEK 551m (+27% y-o-y). We expect gross margins to remain strong on the back of price hikes and see Thebalux remaining clearly accretive for group EBITA of SEK 83m (growth of 40% y-o-y, of which a majority is Thebalux; margin +130bp y-o-y).
