Axactor - Earnings accretion, cost savings and easy comps
Underlying better earnings than expected in Q1 Savings lift est. reported EBITDA 3% for 2022e-23e Estimated fair value range of NOK 8. 4-26. 8/share One-off costs, revaluations and FX blurred in Q1 Reported EBITDA was EUR 17.
7m in Q1, up 26% y-o-y, but 9% below ABGSCe. Adj. for the ~EUR 2m in revaluations and the one-off costs of ~EUR 2.
6m (EUR 3. 2m less savings of EUR 0. 6m), EBITDA was EUR 3.
4m better than expected vs. ABGSCe and ~EUR 2m better than IR-collected cons. Still, this was down 9% y-o-y, primarily due to unusually high REO amortisation, lower 3PC and REO sales (runoff business).
Cash EBITDA adj. for the restructuring costs was EUR 54. 7m, 3% below ABGSCe and 2% below consensus, fully driven by lower 3PC and REO sales.
Still, cash EBITDA adj. for the restructuring costs was up 14% y-o-y. Given the EUR 2m negative revaluation and net negative FX effect of EUR 3.
2m on top of the restructuring costs, reported net profit was particularly distorted; coming in at EUR -1. 4m after minorities. Adj.
for these items, net profit after minorities was EUR 6. 7m, EUR 2. 3m ahead of ABGSCe, driven by lower underlying opex and lower interest expenses.
This was also the first quarter after the roll-up of Axactor Invest, which is expected to be highly earnings accretive for Axactor. No major estimate changes, factor in new ERC and cost savings Apart from factoring in Q1 figures, the latest ERC and accounting for the new cost savings presented in the Q1’21 report, we make few estimate changes. Our estimated EBITDA for 2022e-23e is up 3%, primarily driven by the EUR 4.
8m annualized savings (from YE’21). DCF mid-point valuation uplift of NOK 2. 6/share from savings Axactor continues to build profit brick by brick through cost discipline and further cost savings.
Following the roll-up of Axactor Invest (announced in Q4’20) we estimate that we should see a meaningful earnings uptick going forward, while comps y-o-y should be relatively easy. We estimate a fair value range o.
