* Adj. EBITA 2% better than consensus (+12% y-o-y)
* Growth improving and should be positive in 2027
* We expect consensus to raise 2027-2028 EBITA by 1-2%
Q3 results
Coor delivered a small beat vs consensus, mainly driven by Norway. Sales were SEK 3,007m (3% vs ABGSC 2,922m and 1% vs cons 2,978m), 0% y-o-y whereof -2% organic (ABGSC -4%) and +2% FX. Norway surprised positively with 12% and 9% higher sales than ABGSC and cons. New contracts contributed more than expected, offsetting lower variable volumes. Adj. EBITA of 149m (5% vs ABGSC 143m and 2% vs cons 146m) increased 12% y-o-y on margin improvements in Sweden and Norway while Denmark remained more muted (maintained margins despite lower volumes). The big surprise again, was Norway, where margins on the new contracts surprised (variable volumes are typically more accretive). Reported earnings was impacted by higher IAC, partly driven by the arbitration decision in Denmark and restructuring. Lease adj. FCF was 75m, down compared to last year, but overall OK. R12m FCF was 270m (44% conversion from adj. EBITA, still significantly below its potential). Gearing fell to 2.3x (2.5x LQ) and should fall further in the seasonally strong Q4, potentially allowing for higher payout or more M&A.
Outlook and estimate changes
Management reiterated that market activity remains high, and it is positively that we also start to see that in improving organic growth in both Norway and Sweden which bodes well for growth in 2027. Denmark remains a headwind in Q4 as well, but faces easier comps in 2027. Outlook is therefore good for growth in 2027 alongside continued margin improvements, in our view. We expect consensus to ease 2027-2028 EBITA by 1-2% based on the report.
Final thoughts
The report was solid. We continue to believe that management's strategy is bearing fruit and that the margin potential exceeds the current target of 5.5%. This report supports that view. The share is fairly unchanged since the Q2 report and -2% L3M but -12% L6M. It is trading at 11-10x adj. EBITA on our unrevised 2026-2027 estimates.Management will host a presentation of the report at 10:00 CET (link to webcast).