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HANZA says Q2, 2022 revenue will exceed SEK 850m (634), and group EBITA will increase to over SEK 50m (40). This implies higher margins and slightly better growth than we had previously anticipated. The preliminary figures are also higher than consensus estimates of SEK 788m and SEK 46m, respectively. The Company highlights a positive development for the Other markets segment, where the margin is again improving.
Given the positive profit warning, we conclude that HANZA expects to report EBITA at least nine per cent higher than our estimate.
We believe the news is a positive signal for the Other markets segment, as it is evidence that the expansion program that has affected the margin negatively in recent quarters is completed. Thus, the company has resolved the cost headwinds sooner than we had assumed. For Main markets, HANZA expects a continued strong margin. While it appears that “old” HANZA units are performing well, we believe there is still some negative impact from the 2021 Beyers acquisition, as HANZA has previously referred to.
We will review our estimates more thoroughly following the Q2 report (July 26). However, we expect to increase our top-line forecast somewhat and our FY22 earnings estimates by some five per cent. We also see room for some positive adjustments to next year’s estimates, although we acknowledge a general lack of visibility for industrial companies into 2023.
In sum, we will likely raise our DCF base case value to some SEK 49 per share (47.2). We expect strong earnings momentum combined with attractive valuation multiples to support the shares.
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