Atvexa - Organic growth picks up
Company continues to deliver according to plan Uptick in organic growth behind upgrades DCF valuation range SEK 87-159 (83-152) Q2: Adj. EBIT beat of 48% on new seasonality & lower opex Atvexa reported ’20/’21 Q2 revenues of SEK 522m (460m), corresponding to y-o-y growth of 15.3% (+1% vs. ABGSCe).Organic growth was 7.2% (vs. ABGSCe at 4%) and the deviation towards our estimate was mainly attributed to good uptake in already established units.
Adj. EBIT was SEK 31m, which was clearly better than our assumed SEK 21m. The deviation was partly driven by higher utilisation, a slight change in seasonality where a higher proportion of compulsory schools drives a higher EBIT margin in Q1-Q3 and, lastly, temporarily lower opex from less need for temporary staff, fewer travel costs, postponed operational projects and some received state grants for sick leave.
In Germany, the uptake of new students has been limited as a result of the country’s stricter COVID-19 restrictions, and with the summer approaching, we think that headwind will continue into Q3. All in all, we think it was a solid Q2 report where the organic growth impressed. In addition, the balance sheet continues to strengthen, and the lease adj.
net debt is now SEK 74m. Margin target of 5% intact, we estimate 5.3% long-term We believe the adj. EBIT margin beat in Q2 will normalise slightly in H2 on the back of the new seasonality and that operational projects will be resumed once it is safe from a COVID-19 standpoint.
However, we do forecast an adj. EBIT excl. IFRS 16 of 5.5% in ’20e/’21e, coming down to 5.3% in ’22e/’23e (vs financial target of 5%).
Our sales estimates are lifted by higher assumed organic growth of 3%-2.5% for ’21e/’22e-‘22e/’23e. In total, it results in a 5% EPS increase long term. CEO resigns but no drama expected On the back of our estimate revisions, we increase our DCF valuation range to SEK 87-159 (83-152).
We would also like to highlight that the current CEO, Katarina Sj....