First impression HANZA, Q3 2022: Strong sales and raised financial targets
8 Nov 2022
This morning, HANZA reported its Q3 2022 earnings. Below are our first impressions of the report.
- HANZA reports continued strong organic growth of 26 percent, topping our estimate of 20 per cent, and in line with the previous quarter. Once again, the main positive deviation is in the Other Markets segment with 33 percent organic growth. Re-invoicing of energy and material costs is a major factor, but volume growth also appears solid.
- EBITA rose to SEK 50m (38) which was in line our estimate. Higher margin than expected in the Other markets segment compensated for somewhat disappointing profitability in the Main markets segment (see table below).
- HANZA says order intake is still high. Cash flow from operations clearly improved to SEK 83m (-19).
- HANZA launches new financial goals to reach sales of over SEK 5bn for 2025 and an EBITA-margin of eight per cent by the end of 2025. This implies CAGR of at least 19 percent 2021 to 2025, clearly higher than the previous target of ten percent growth. We believe this is more ambitious than anticipated and the target scenario is reminiscent of our bull case (~SEK 80 per share valuation). Further acquisitions are most likely needed in our view.
All in all, the strong growth and raised financial targets are encouraging signals.
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 analysts Niklas Elmhammer and Fredrik Nilsson do not own and are not allowed to own shares in the Company analyzed.