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Third party research

Nolato: Slight beat on adj. EBITA - ABG

Nolato

This is a third party research report and does not necessarily reflect our views or values

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* Adj. EBITA SEK 274m (+4% vs. ABG, +2% vs. IR consensus)* We expect consensus adj. EBITA to come up by 1-2%* 14.5x '26e EV/EBITA on pre-Q3 estimates (and on yesterday's close)Q3 outcomeSales came in at SEK 2,342m (+1% vs. ABG 2,324m, 0% vs. IR cons 2,344m), down 2% y-o-y, but organic growth was +2% (ABG +1%). Adj. EBITA was SEK 274m (+4% vs ABG 265m, +2% vs. cons 268m), for an adj. EBITA margin of 11.7% (ABG 11.4%, cons 11.5%), and this adjusts for a positive SEK 7m one-off from an insurance claim in the US (booked in other income and not affecting either business area). The higher-quality segment Medical came in 4% below consensus expectations on EBITA, while Engineered was 9% above. FCF was SEK 118m (ABG 166m), for an FCF/net income conversion of 55%.Outlook and estimate changesThe company does not provide much in terms of outlook commentary in the report. Regarding the expansion project in Hungary tied to a specific, larger customer project, validation deliveries have started and will remain at similar levels in the coming quarters, followed by a subsequent increase. All in all, we expect consensus adj. EBITA to come up by 1-2% on the slight earnings beat.Valuation and conference call detailsOn our pre-Q3 estimates (and on yesterday's closing price) the share trades at 14.5x '26e EV/EBITA, slightly below its historical average of 15.3x. The report was solid with earnings slightly above expectations, although not in the highest-quality segment Medical. Finally, the company will host a conference call at 14:45 CEST, register here.
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