* Company confident about parrying input cost pressure
* We make only minor estimate revisions
* Accelerating organic growth ahead, and room for M&A
Company confident about parrying input cost pressure
Going into the report, our key concern was related to rising input costs, as Nolato is reliant on the purchasing of petrochemicals, but the company expects only limited timing impacts from this, which we found reassuring. According to the company, it has roughly SEK 1.6-1.7bn in material costs that are, to varying degrees, linked to oil prices. On these costs, it has seen average inflation of ~5-10%, i.e. the mid-point implies ~SEK 120m higher costs on an annualised basis. However, keep in mind that it roughly takes only one quarter to pass these costs on to customers, meaning we calculate the actual EBITA impact to be only SEK -30m (3% of '26e EBITA), split roughly 50/50 between Q2 and Q3.
We make only minor estimate revisions
The Q1 numbers were undramatic, with EBITA 1% above Modular Finance IR consensus. We make no major revisions, updating FX assumptions and, as mentioned above, factoring in some slight margin pressure for Q2 and Q3 (although note we already downgraded margins a bit on this theme ahead of the report). At the group level we make EBITA downgrades of 2% for '26e and 1% each for '27e and '28e.
Accelerating organic growth ahead, and room for M&A
The stock is trading at 14x '26e EV/EBITA, compared to its historical fwd. multiple of 15x, and offers ~4-6% lease-adj. FCF yields for '26e-'28e. We see organic growth accelerating ahead, slightly in Q2e, but more so in Q3e and beyond, driven by the ramp-up of GLP-1 volumes at the new Hungarian site. We also see good opportunities for an accelerated pace of M&A given the strong balance sheet, with r12m ND/EBITDA (ex. pensions and leasing) at 0.5x, and we note the company’s communication on M&A opportunities has become more forward-leaning in recent quarters.