Careium: Set for positive FCF in Q1 - ABG

5% Q1e adj. EBITA margin and 7% org. growth
Limited adj. EBITA upgrades, but net profit down slightly
Trading at 10x '23e EV/EBITA - share is up 78% YTD


Q1e to (finally) deliver FCF turnaround

We forecast Q1 sales and adj. EBITA of SEK 193m and 9m, respectively, corresponding to y-o-y growth of 8% (7% organic) and a margin of 4.6%. After a couple of demanding quarters, Q4 showed an impressive turnaround P&L wise, particularly looking at the adj. EBITA margin rebound between Q3-Q4'22 (from -7% to 7%). The Q4 cash flow, however, was less appealing (SEK -53m FCF ex. M&A), mainly due to unfavourable working capital effects. In Q1, we expect the solid growth to continue, but not as good as in '22 mainly on account of tougher comps, while the margin stays in positive territory albeit down slightly from Q4 on seasonality. Finally, we believe the former NWC tie-up during the last three quarters will not continue in Q1, while capex is estimated to drop slightly q-o-q, resulting in positive FCF in Q1'23e.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2023/3/careium---set-for-positive-fcf-in-q1/