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.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.
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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