Arjo (Hold, TP: SEK35.00) - Soft start to 2025
Q1 sales were broadly in line, but adj. EBITDA was c8% below our forecast and c6% below consensus. The main differences came from higher operating expenses than expected as well as a slightly lower gross margin. Product sales were weak, but service/spare parts and rental saw stronger sales than expected, a mix that is generally negative for the margin trend. We reiterate our HOLD and have cut our target price to SEK35 (42).Co. is the parent company of a group engaged in the development, manufacture, marketing, and sale of hygiene systems and patient handling equipment. Co.'s operations are divided into three divisions. The Hygiene Systems division is engaged in the manufacture of bathing systems, sit-baths, shower cabinets, shower trolleys, and integrating hygiene lifters. The Patient-Handling Products division is engaged in the manufacture of equipment for lifting and transferring elderly and disabled people. The Other Products division is engaged in the provision of installation and maintenance service; the sale of spare parts; and the production of therapy tanks, pool lifts, hydrotherapy pools, bath oils, shampoos, and disinfecting agents.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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