EUR 423.80 For Business Accounts Only

Nobia Minor model adjustments

We are 5% below consensus on Q3e EBIT (results due on 23 October). We expect the initiatives in the UK trade segment to have a short-term adverse effect on profitability and that Nobia continues to offset the weakness in the Nordic project markets with strong performance in the retail segment. We have updated our estimates, owing mainly to FX. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our SEK70 target price. Q3 preview. We forecast sales of SEK3,175m (1% above Bloomberg consensus) and EBIT of SEK260m (5% below consensus). We expect organic sales growth of 0% YOY, with the Nordics at -1% YOY, where we expect another quarter with growth hampered by the weak Swedish project markets (c5% of group sales) offset by strong performance in the retail segment. For the UK, we expect flat organic sales YOY (-1% YOY in Q2). Management has talked favourably about deliveries to larger projects in London, which should provide a tailwind going into H2e. We also expect the UK EBIT margin to drop by 60bp YOY to 7.0%, as Nobia is stepping up initiatives in the trade segment, resulting in a temporary cost increase.