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Third party research

SJR: Demand remains high - ABG

Ogunsen

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

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Impressive profitability in Q3
Estimates up on higher expected margins
Changing name to Ogunsen AB

SJR reported Q3 net sales of SEK 96.8m (76.1m), which was in line with ABGSCe. However, sales growth was driven more by revenue per employee rather than a high net recruitment. We expected higher net recruitment but lower revenue per employee. The reported mix led to an impressive profitability, with SJR reporting EBIT of SEK 11.3m (5.3m), corresponding to an EBIT margin of 11.6% (6.8%). We expected EBIT and an EBIT margin of SEK 10m and 10.3%, respectively. Therefore, reported EBIT was 13% above ABGSCe. The deviation stems from internal efficiencies with higher utilization or price towards customers as well as lower personnel expenses than anticipated. SJR ended the quarter with a cash position of SEK 46.3m (35.6m).

As part of the new growth initiative that aims to double the revenue in the next five years, SJR in Scandinavia will change name to Ogunsen. This change will occur on 16 November. On our revised numbers the share is trading at a ‘22e P/E of 13.7x, EV/EBIT of 9.6x and an anticipated dividend yield of 5.2%.
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