* Adj. EBITA 1% vs cons, -2% vs ABGSCe, up 3% y-o-y
* Continued margin increase, and org. growth to improve in Q4-Q1
* Estimates likely largely unchanged; CC at 10:00 CET
Q2 results
Sales were stable but slightly below expectations (-2% vs ABGSCe and Infront consensus), driven by Norway and Denmark (6% and 3% below cons). Sales declined 3% y-o-y, whereof organic growth was -3% (positive in Sweden/Finland, and negative in Norway/Denmark). Adj. EBITA was SEK 170m, +3% y-o-y (-2% vs ABGSC and 1% vs cons), holding up better due to efficiency gains driving margin expansion (5.5% vs 5.2% last year). EBIT and net profit were in line with cons. FCF was weak due to seasonality and in line with last year (SEK -8m vs -9m last year) and the LTM cash conversion of 47% was in line with last quarter. Gearing of 2.5x was up slightly from 2.3x in Q1 due to the dividend and seasonal cash flow but down vs 2.9x last year.
Outlook and estimate changes
Management said it looks forward to the rest of 2026 with confidence and expect that its initiatives to boost add-on sales will bear fruit. Near-term, comps remain tough on organic growth due to the contract losses in Denmark and high variable volumes in Norway in Q3 last year. But as these effects fade from Q4-Q1, we think Coor is well-positioned to come back to solid organic growth, while margins should continue to improve. We do not expect any material estimate changes on the back of the Q2 numbers.
Final thoughts
Overall, it was a solid report. The share has been weak into number, -14% L3M vs OMXSGI +3% and closest peer ISS +17%, and now trades at 10x adj. P/E and 10x EV/adj. EBITA on our 2027e vs its five-year average of 12x (NTM).
Management will host a presentation of the report at 10:00 CET, you can use this link to participate.