• Minor estimate revisions
• Tougher order intake comps in Q4
• NTM EV/EBIT around 7x

What to look for in Q4'24e

We continue to expect positive organic growth of 6% in Q4'24, and that implies sales of SEK 217m and adj. EBIT of ~SEK 15m, corresponding to a margin of 6.7%. Our updated Q4 estimates therefore imply negative estimate revisions of -2% for Q4 sales and -4% for Q4 EBIT on the back of FX changes and slightly lower organic growth. We expect Nilörn to generate an order intake of ~SEK 230m, implying a ~10% y-o-y decline, primarily due to difficult comps. Notwithstanding the difficult comp, SEK 230m in order intake is still solid from an absolute perspective.

Estimate changes

We make only minor estimate changes, raising '25e-'26e sales by 1-2% while cutting '25e-'26e EBIT by 1-4%. We foresee slightly lower margins in '26e compared to '25e due to expansionary investments in Bangladesh and potentially Portugal, and that is likely to temporarily reduce capacity utilisation. Nilörn's order intake and gross margin have both been very strong lately, and we have been cautious with respect to extrapolating either metric. Nilörn is unlikely to achieve its EBIT margin target of at least 10% in '24e, but we assess that this is more likely in '25e as the outdoor segment normalises.

Valuation

Our new estimates imply that Nilörngruppen is trading at an NTM EV/EBIT of ~7x. We note also that the company is trading at an NTM EV/EBIT level that is ~25% below the corresponding five-year median.