Bergman & Beving (Hold, TP: SEK165.00) - High gross margins re-established
The Q2 report was mixed, with slightly weaker growth but better profit margins than expected. The result was in line with expectations, prompting limited forecast changes. The gross margin tailwind continued, driven by a more favourable FX trend as well as on-going pricing initiatives. We still see the new CEO as a potential catalyst for a more acquisitive growth agenda, utilising the company’s ‘financial muscle’, but are waiting for him to establish a track record. We reiterate our HOLD 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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