Atvexa - Three new acquisitions announced

Better utilisation drives organic growth ‘21e/22e sales up 5. 4%, mainly on acquisitions DCF valuation range of SEK 83-152 (78-143) Q1 ‘20/21: Sales of SEK 505m (443m), +2% vs. ABGSCe Atvexa reported net sales of SEK 505m (+14. 1% y-o-y) for the first quarter of its fiscal year.

It was +2% above ABGSCe, and the beat was driven by higher organic growth and a slightly higher contribution from acquisitions. The organic growth of 4. 1% (5.

3% excl. FX) was achieved through higher utilisation in existing units in conjunction with an increase in units and higher voucher payments. We had accounted for the latter two factors, but the higher utilisation exceeded our expectations.

In addition to the two acquisitions consolidated in Q1, three more were announced after the period ended. However, only one of them is finalised (Ask och Embla Förskolor) and the other two are under LOI. Adj.

EBIT excl. IFRS-16 was SEK -6m (-11m) vs. ABGSCe at -11m.

However, we still think investors should expect a FY long-term adj. EBIT margin of around 5%, and see the beat as a quarterly deviation that will even out over the year. Acquisitions and higher organic growth behind revisions The higher utilisation in existing units seen in Q1 will probably benefit Atvexa throughout the year.

As such, we assume a slightly higher organic growth rate in ‘20/21e; in conjunction with the announced acquisitions, this leads to a positive sales revision of 5. 4% for ‘21/22e. We have included all three acquisitions in our estimates, but since two of them are not yet finalised, we have assumed consolidation as of 1 March.

In total, we believe the acquisitions will add roughly SEK 80m in yearly sales. Ready to focus on Germany post-COVID-19 Atvexa started to report Scandinavia and Germany as separate units in the Q1 report, and even if there are currently some COVID-19 headwinds in Germany, we think this is a signal of the company’s future goals. According to a recent study from Institut der Deutschen W.