• Q1e: orders -2%, sales +1% y-o-y, adj. EBITA margin 7.0% (6.2%)
• Expect stable demand and improving margins in '24e
• Hope to see M&A drive growth as organic sales normalise

Q1e: flat orders and sales, but improving margins

For Q1, we expect order intake of SEK 233m, down 2% y-o-y, and sales of SEK 242m, up 1% y-o-y, as growth comes down in '24 after two strong years. On adj. EBITA, we have SEK 16.9m (14.8m), for a margin of 7.0% (6.2%), a seasonally lower margin, but up y-o-y as we expect operational improvements to continue to take effect. We think this will convert into adj. EPS of SEK 0.61 (0.51), and a lease adj. FCF of SEK 5m (6m).

We hope to see M&A drive growth in '24

We make minor adjustments to sales and EBIT estimates going into the report, and maintain our outlook for 2024, as we expect stable demand to result in limited organic sales growth, while the EBITA margin gradually improves thanks to increased operational efficiency. As we expect lease adj. ND/adj. EBITDA to go from 1.0x to 0.3x this year, and because interest rates are forecast to start declining, we hope to see one or more acquisitions during the year, which would drive additional growth for the group.

P/E 11-10x in '24e-'26e, fair value of SEK 35-45

The share is up 5% L3M (vs. peers at -5%, and OMXSSMAC at +1%) and is currently trading at a '24e-'26e EV/EBITA of 10-8x and a P/E of 11-10x vs. the peer medians of 17-12x and 15-11x, respectively. We reiterate our fair value range of SEK 35-45.