Addtech - Organic growth disappoints

Sales down 10% organically, -6% vs. ABGSCe EBITA SEK 335m, -6% vs. ABGSCe and -5% vs. cons Valued higher than peers and strong into weak numbers Q4 results Sales SEK 2,927m (-6% vs.

ABGSCe 3,116m, -5% vs Infront consensus 3,092m) down 10% organically (ABGSCe -1. 8%), M&A +9% and FX -3% contribution to sales. Automation missed by 14% on sales due to timing with project deliveries but delivered 10% better EBITA vs.

ABGSCe. Industrial processes missed 41% on EBITA, which was largely due to revaluation of earnouts of SEK 31m. Adjusting for that, EBITA was only 6% below expectations.

EBITA 335m (-6% vs. ABGSCe 358m, -5% vs cons 354m) on margins of 11. 4% (ABGSCe 11.

5%, cons 11. 4%). The revaluation of earnouts had an overall negative effect of SEK 15m this quarter, bringing adj.

EBITA to SEK 350m, -2% vs. ABGSCe and -1% vs. cons.

Estimate changes and outlook We expect consensus to lower sales by 3-4% on the report, and adj. EBITA down 2-3%. Management commented positively on order backlog at the end of the quarter, but were cautious on guidance as there’s uncertainty about how the ongoing supply chain constraints will affect delivery capacity over the coming quarters.

Share view At c. 28x EV/EBITA NTM, Addtech is trading at a c. 5% premium to its peer group.

The share is up 30% YTD (highest among peers) and we believe expectations were high ahead of the report which could amplify the justified negative reaction to its Q4 report. More information at conference call at CET 10. 00.

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