Allgon
Newly enlarged personnel base, large ’20e EBIT revisionLooking at Q1’20e, we believe that Allgon will have been largely unaffected by the COVID-19 outbreak. For example, when assembly of industrial radio control products in China was shut down, we believed that Allgon could satisfy demand by relying on its ~SEK 100m inventory, facilitated by Tele Radio’s global network of ~20 warehouses. Allgon’s Chinese assembly sites are now up and running again, but we think that Allgon could face tough conditions in Q2e and Q3e given recent developments. As such, we cut Q2’20e organic growth from 12.
2% to -6. 6%, and Q3’20e organic growth from 12. 1% to -1.
1%. On an annual basis, this takes ‘20e organic growth from 11. 8% to 3.
1%. Given Allgon’s recently enlarged personnel base, which we believe will require quarterly personnel expenses of ~SEK 60m, we lower ‘20e EBIT by 25. 6%.
