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.

Read our latest update on Hanza here

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