Ferroamp - Pent-up demand during Q1

Q1 net sales of SEK 21m (vs. ABGSCe at SEK 29m) Pent-up demand during the quarter Outlook appears solid – despite C-19 impact Q1 results: pent-up demand and higher order intake The seasonally weak Q1’21 marks Ferroamp’s first calendar quarter. Net sales came in at SEK 21m (vs. ABGSCe at 29m), for a 29% y-o-y growth with a doubling in the order intake compared to Q1 last year.

EBIT came in at SEK -10m (-7% vs. ABGSCe at SEK -9m), with a negative effect of SEK -4m stemming from higher raw material and transport costs. All in all, it was a somewhat slow start to the year, with a cold winter and lack of component and material, negatively affecting the solar PV side.

However, we saw a pent-up effect during the quarter, with March sales of SEK 11m. Conclusion and forecast changes Management highlight an underlying demand for its products with a strong order intake, boding well for the following quarters, in our view. In order to be able to meet the demand, Ferroamp has built some inventory during Q1.

All in all, we expect March figures to colour Q2 and expect a slight catch-up effect during Q3. On the back of this report, we expect to make sales downgrades in ‘21e-‘22e, likely 2-5%, otherwise relatively unchanged. Stock -12% L3M The share is down -12% in L3M, currently trading at 5.

3x ‘21e EV/Sales which comes down to 1. 6x EV/Sales in ‘23e.