Equity Research HANZA: First impression Q2, 2023
25 Jul 2023
This morning, HANZA reported its Q2 2023 earnings. Below are our first impressions of the report.
- Sales growth at 21 per cent was slightly below our expectations and organic growth was 13 % (23 per cent in Q1). Earnings (EBITA) were SEK 92m (57), about ten per cent better than we had expected. Growth has been affected by lower sales from extraordinary component or energy costs compared to the previous year
- We believe the margin improvement to 8.6 per cent (6.4) was solid, with profitability at an even higher level than the previous quarter. The EBITA margin in the first six months of 8.1 per cent shows that HANZA is on track to reach its 2025 financial target.
- The main positive surprise is better than expected sales and margins in the Main markets segment
- Cash flow from operations at SEK 86m (29) confirms improved cash conversion
- HANZA says order intake is still very good in virtually all markets. Other contract manufacturers have reported lower backlogs from shorter order lead times
- We believe a positive share reaction from the strong EBITA is in the cards and will review our earnings estimates for a possible upgrade following the report.
In the table below, we compare the Q2, 2023 reported sales and earnings vs our estimates.
Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyzes. The information has been compiled from sources that Carlsquare considers to be reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or the like. Opinions and conclusions expressed in the analysis are intended only for the recipient.
The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns.
The analysis is not directed to U.S. persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution.
The analysis is a so-called Commissioned Research Report where the analyzed Company has signed an agreement with Carlsquare for analysis coverage. The analyzes are published on an ongoing basis during the contract period and for a usual fixed remuneration.
Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.
The analyst Niklas Elmhammer does not own and is not allowed to own shares in the Company analyzed.