DnB Markets - Bergman Beving (BERG B) Bergman Beving (Buy, TP: SEK140.00) - On firmer footing

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DnB Markets

Karl-Johan Bonnevier

Bergman & Beving (Buy, TP: SEK140.00) - On firmer footing

Bergman & Beving's Q2 report was clearly more balanced with all units contributing, as the efficiency improvement programme in Tools & Machinery produced a QOQ turnaround, with overall Q2 numbers very much in line with our expectations. We still see good upside potential in the mid-term operational improvement case at an attractive valuation, hence we reiterate our BUY recommendation with a new target price of SEK140 (SEK145), noting strong insider support in the shares adding conviction.

02/11/2017 19 EN

Underlying

Bergman & Beving

B&B Tools AB provides the industrial and construction sectors in northern Europe with industrial consumables, industrial components and related services. Co. has four business areas, Luna (Tools & Machinery), Skydda (Personal Protective Equipment), Essve (Fastening Elements) and Gigant & Grunda (Work Environment & Consumables), which supply TOOLS and other market channels with industrial consumables and related services. TOOLS is Co.'s market channel for industrial consumables and industrial components for Nordic industry. Via TOOLS, Co. has operation in Sweden, Norway and Finland.

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SE0000101362 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Karl-Johan Bonnevier

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DnB Markets

Bergman & Beving (Buy, TP: SEK200.00) - New target ‘500/10/45’ by 2025/27

The Q3 report showed stronger profit margins and FCF generation, which we believe allows for a continued acquisition focus (six deals YTD), offsetting weaker demand indicators and FX. We have raised our 2023/24–2025/26e EPS by 4–7%. We see potential in the ‘focus model’ to reach a 10% EBIT margin and EBIT of SEK500m by 2025/26 and P/working capital of 45% by 2026/27, now in our value gap analysis. We reiterate our BUY and have raised our target price to SEK200 (170).

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February 9, 2024 February 9, 2024 1 EN

DnB Markets

Bergman & Beving (Buy, TP: SEK170.00) - Strong Q2 execution

The Q2 report showed strengthening profit margins and FCF generation, which we believe allows for a continued acquisition focus (four deals YTD), offsetting weaker demand indicators and FX. We have raised our 2023/24–2025/26e EPS by 1–4%. We see potential in the ‘focus model’ to grow EBIT to SEK500m by 2025/26, highlighting value creation from internal efficiencies and acquisitions, similar to our value gap analysis. We reiterate our BUY and have raised our target price to SEK170 (165).

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October 19, 2023 October 19, 2023 1 EN

DnB Markets

Bergman & Beving (Buy, TP: SEK165.00) - Much-improved FCF generation

The Q1 report matched our expectations. We believe the much-improved FCF generation allows for a renewed acquisition focus (three deals YTD), partly offsetting weakening demand indicators and FX, leading us to do only minor 2023/24–2025/26e EPS cuts. We see potential in the CEO’s ‘focus-model’ approach and ambition to grow EBIT to SEK500m by 2025/26, highlighting possible value-creation from internal efficiency and acquisitions, similar to our value gap analysis. We reiterate our BUY and SEK165 target price.

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July 17, 2023 July 17, 2023 1 EN

Medistim (Hold, TP: NOK190.00) - Sales in Americas weaken

Revenues grew 3.5% YOY in Q1 (currency-neutral total sales grew 2.2%), below our estimate c6%. The EBIT margin of 24% was almost back to normal and in our view shows the low margin in Q4 2023 (16.4%) should be seen as a one-off. However, we remain concerned about revenue growth, especially in the Americas, after the fifth consecutive quarter of declining currency-neutral sales. Thus, while we reiterate our HOLD, we have lowered our 2024–2026e sales by c3–8% and cut our target price to NOK190 (210).

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18h / 8m 18h / 8m 1 EN

Niklas Wetterling

Niklas Wetterling

Catena (Buy, TP: SEK515.00) - Time to put the money to work

The Q1 results were solid in our view; although the vacancy rate rose, it was from a very low level, and was therefore of limited concern. We reiterate our BUY and have raised our target price to SEK515 (500). In our view, Catena has (too much) firepower following its last equity raise and we would like to see more M&A, project activity, or speedy reinvestment. Following the equity raise the stock looks highly valued on a 2025–2026e P/FFO of 21–19x, but that drops to 15–14x adjusted for earnings from our forecast recurring development gains.

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18h / 8m 18h / 8m 1 EN

Miika Ihamaki

Miika Ihamaki

Kesko (Hold, TP: EUR17.00) - Technical(ly) weak

Q1 disappointed due to Building & Technical Trade (BTT) profitability well below expectations. We continue to see a mixed case, with stable to gradually improving Grocery Trade (GT) but still-weak Building & Technical Trade. We reiterate our HOLD but have cut our target price to EUR17 (18), after lowering our 2024–2026e clean EBIT and DPS by c4%.

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18h / 8m 18h / 8m 1 EN

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Bergman & Beving (Buy, TP: SEK140.00) - On firmer footing

Bergman & Beving (Buy, TP: SEK200.00) - New target ‘500/10/45’ by 2025/27

Bergman & Beving (Buy, TP: SEK170.00) - Strong Q2 execution

Bergman & Beving (Buy, TP: SEK165.00) - Much-improved FCF generation

Medistim (Hold, TP: NOK190.00) - Sales in Americas weaken

Catena (Buy, TP: SEK515.00) - Time to put the money to work

Kesko (Hold, TP: EUR17.00) - Technical(ly) weak

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