Publicerat: 2021-11-08 16:06:23
Another quarter above our expectations
Positive ‘22e revisions for sales and EBIT of 3% and 7%
We think Eurocon will meet its targets in ‘22e
Eurocon reported Q3 net sales of SEK 59.4m (+24% y-o-y), 7% ahead of ABGSCe. Higher sales per consultant was the main driver for the deviation. Management mentioned a positive business outlook and experienced a higher utilisation rate in the quarter in conjunction with a successful hiring campaign that will have a positive effect on Q4. An uptick in order intake is also positive from a planning point of view, as it will make it easier for the company to achieve a high utilisation rate in the coming quarters. EBIT was SEK 4.9m (1.3m), corresponding to an EBIT margin of 8.2% (2.8%). It was better than the 6.2% we anticipated, and the deviation was driven by a higher utilisation rate and higher sales per employee. In fact, it was the highest EBIT margin for a Q3 since the successful Q3 in 2017, when Eurocon reported a margin of 10.5% in Q3 and 12.7% for the full year.
After two challenging years, the LKAB announcement of investments up to SEK 400bn in the next 20 years for the production of fossil-free steel through the HYBRIT JV with Vattenfall and SSAB looks to be exactly what Eurocon needed. The share is trading at ‘22e P/E of 11.5x, lower than the two-year average of ~14x.
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