Addtech - The end of tough comps

Q3 adj. EBITA 0% vs. consensus Strong performance in Energy We leave ‘21/22-‘22/23e EBITA unchanged Report in line but with encouraging Energy performance The Q3 report came in relatively in line with expectations. Sales were SEK 2,881m (-2% vs.

ABGSCe of SEK 2,917m, 0% vs. Infront cons. of SEK 2,882m).

Organic sales declined by 4% (ABGSCe -3%), with a solid +8% from M&A and -3% FX contribution. Although COVID-19 and tough scrubber comps continue to hamper sales, Addtech managed to grow 1% y-o-y this quarter. EBITA came in at SEK 304m, in line with consensus and 1% below ABGSCe for a margin of 10.

6% (8. 3%). Worth noting is the governmental support that boosted the margin by 50bp in the quarter.

Behind the curtains, there were some more drastic deviations. Components had a negative deviation of 23% on EBITA, due to restructuring, bad sales mix, and negative currency. However, it was offset by a remarkable performance in Energy on the back of high activity within electrical infrastructure and wind power.

We estimate that the segment grew 10% organically and had record-high margins of 13. 2%. EBITA unchanged for ‘21/22-‘22/23e We fine-tune estimates, lowering EBITA by 2% for ‘20/21e after commentary from management regarding a potentially difficult Q4 on the back of unfortunate project call-off timings.

We leave EBITA estimates for ‘21/22e and ‘22/23e unchanged, as improved customer demand in most segments are offset by lowered assumptions for the marine sector. Although fuel spreads have increased, we forecast relatively muted scrubber activity with shipping companies deferring large investments until the marine market has fully recovered. However, we remain positive in the long term and have confidence in the business positioning towards structural growth drivers in sustainability.

Easier comps ahead This quarter marks the end for scrubber related headwinds, and the comps for the coming quarters are looking significantly better. On our revised figures, the.