Equity research HANZA: First impression Q4, 2023

 This morning, HANZA reported its Q4 2023 earnings. Below are our first impressions of the report.

• Earnings (EBITA) excluding acquisition costs were SEK 89m (63), about six per cent lower than we had expected. The negative deviation compared to our forecast was in the Main markets segment, while Other markets performed better than we had assumed. Group margins increased to 8.4 per cent (6.3).
• Sales in Q4 grew five per cent, in line with our expectations. Excluding currency effects and lower sales from the extraordinary component or energy costs compared to the previous year, organic growth was some four per cent.
• HANZA upgrades its financial targets somewhat to at least SEK 6.5bn in sales and a minimum EBITA margin of eight per cent in 2025. Previously, the company targeted sales of SEK 5bn and an EBITA margin of at least eight per cent for 2025. One important factor is the acquisition of Orbit One at the end of 2023.
• The dividend is increased more than we had expected to SEK 1.2 per share from SEK 0.75, supported by good cash flow in the latest quarter.
• HANZA sees a mixed picture at the beginning of 2024, with a slowdown in order intake from some customers at the beginning of 2024, while other parts of the customer base continue to grow.
• We believe a muted share reaction is in the cards. We will review our earnings estimates for a possibly slightly lower profitability in the short term.

In the table below, we compare the Q4, 2023 reported sales and earnings vs our estimates.

Read our latest update on Hanza here

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