* Orders +39% y-o-y and 5% above ABGSCe for a book-to-bill of 1.13
* EBITA adj. of SEK 41m, 5% above ABGSCe, 6.4% margin (4.8%)
* FY guidance unchanged, but expected run-rate implies higher sales
Q2 results
Orders were up 39% y-o-y and 5% above our estimate. Sales grew 19% y-o-y and were 3% below our estimate. With a margin of 6.4%, 0.5pp above our estimate, EBITA adj. was 5% above our estimate. Lease adj. FCF was -22m, bringing the R12m figure to 68m, i.e. 85% of net income. Inission Power (Enedo) drove the beat, with EBITA of SEK 3.8m (-4.7m) against our 2.3m, a third consecutive positive quarter at a 3.1% margin on higher volumes, pricing and a lower cost base. EMS EBITA of 37.1m (28.8m) was close to our 36.6m, despite weaker sales in April and May, with disruption in European PCB supply affecting the phasing of sales within the quarter.
Estimate changes
The Q2 numbers in isolation imply EBITA adj. comes up 1%. Inission left its FY'26 guidance of SEK 2,300-2,500m at a >6% EBITA margin unchanged, even though it flagged that it expects a run-rate of SEK 210-220m per month, implying SEK 2,589m at the midpoint, lending support to our view that the company will finish the year above guidance. Management sees strong demand in defence and data centre, weaker in industrial and electrification, and higher M&A activity, with the ambition to complete one acquisition this year.
Company valuation
Over the past three months, the share has returned -12%, compared to the Nordic EMS peer median of -15% and the +5% of the OMX Stockholm Allshare. The share is currently trading at 13x-9.7x '26e-'28e P/E, compared to its 10-year historical median of 13x-8.9x and peers at 16x-12x.