DistIT - Financial target of 26% EBIT CAGR

New financial targets ahead of CMD Sales target of SEK 3. 5bn and 8% EBIT margin by 2025 Trading at c. 3x EV/EBIT on ‘25e targets New financial targets announced today DistIT has announced new ambitious financial targets. Most notable are the targets of SEK 3.

5bn in sales for ‘25e with EBIT margins of 8%. This would imply a sales and EBIT CAGR of 8% and 26%, respectively, for ’20-‘25e. Although we have not published estimates for ‘25, the targets are well above a reasonable extrapolation of our ‘23e trajectory, which would imply sales of c.

SEK 3bn in ‘25e. However, we do not include potential M&A in our estimates. DistIT communicated a target of accumulated M&A capacity of SEK1.

5-2bn, meaning cash and balance sheet headroom for acquisition spend. In our view, it would have to add SEK 0. 5bn from M&A to reach its sales target.

We regard the EBIT margin target of 8% to be reflective of the margin accretive growth of its own brands and that it will mainly be a result of further improvements in sales mix. CMD on 25 March will go into further detail DistIT will host its first capital markets day on the 25 March where it will further explain the financial targets. We expect that the focus will primarily be on own brands, which is at the core of its strategy and supports both the growth and margin targets.

Furthermore, we expect DistIT to shed some light on the M&A strategy in terms of the profile of potential acquisition targets. To attend the digital CMD, attendees have to register by emailing oskar. magnusson@distit.

se. New all-time high, trading at 8. 5x ‘21e EV/EBIT Naturally, the share reacted positively to the financial targets, jumping c.

12% to a new ATH of SEK 80 per share. At this price, its trading at c. 8.

5x EBIT on ‘21e. Furthermore, the share is trading at c. 3x EV/EBIT on ‘25e based on the financial targets communicated today.