Serial acquirers: Earnings trough, M&A in focus

Return to organic growth in Q3e, increased M&A activity likely. '24e-'26e EBITA/EPS up 3% (FX +1%, M&A +2%). ~21x EBITA limits upside, but mild downturn+M&A could offer support.

Organic decline no cause for alarm

Calendar Q1 due Thursday, 16 May. '24e/'25e-'25e/'26e EBITA up 3%; 6% CAGR '23-'26e. Keep HOLD, TP SEK 245 (225).

All is well on Addtech's front

In-line earnings, high quality and pos. org. growth, '23/'24e-'25/'26e EBITA up 1-3%; 4% CAGR cal. '23-'25e, keep HOLD, TP SEK 225 (215)

Fairly in-line, but better organic growth

Serial acquirers: Slowdown caps upside

Stable demand, but deceleration continues, '24e-'25e EBITA unchanged, neg. risk/reward after strong multiple uplift since Q3.

Quality remains, but valuation has come up

Down to HOLD (Buy), TP SEK 215 (205), '23/'24e-'25/'26e EBITA down 0-1%; 6% CAGR, cal. Q4 7 Feb

Earn-outs: In the end, cash trumps EPS

Earn-outs: 0.6x of ND/EBITDA, and 25% of FCF, limited EPS impact (1-2%), but notable company deviations, FCF and debt impact more important than the earnings fluctuations.

Serial acquirers: As cyclical as before?

We argue that the 'Big-4' (Addtech, Indutrade, Lagercrantz, Lifco) serial acquirers are inherently cyclical and should follow the overall trend that we see among other capital goods names, given the extended period of weakening PMIs.

Serial acquirers Q3 recap: A steady deceleration

Q3 recap: deceleration continues, but better org. sales, 5% EBITA beat, '23e-'25e EBITA up 2-1% post-Q3, sector up 4% YTD (EPS up 14%), now trading at 16.9x F12m EV/EBITA, 3% below 10Y avg.

Slower pace, quality nonetheless

2% adj. EBITA beat, +1% org. sales (cons +3%), '23/'24e-'25/'26e EBITA up 2%; 7% CAGR '22-'25e, keep BUY, TP SEK 205

2% adj. EBITA beat, but slight miss on org. sales

Heads-up for report 26 October

Serial acquirers: Quality not yet at a discount

One final double-digit growth quarter, with org. growth to turn neg. in Q4e. '23e-'25e EBITA down 0-2%, EPS down 1-4%. Entry point increasingly attractive: ADDT up to BUY (Hold).

BUY on resilient quality

Up to BUY (Hold), TP SEK 205 unchanged. '23/'24e-'25/'26e EBITA +1/0/-1%. Calendar Q3 due Thursday, 26 October.

Deceleration triggers sector correction

Q2 recap: deceleration visible as org. sales miss, 3% EBITA beat, '23e-'25e EBITA down 0-2% post-Q2, sector up 8% YTD (EPS up 11%), now trading at 15.9x F12m EV/EBITA, 3% below 10Y avg.

Strong, but below high expectations

1% adj. EBITA miss as org. growth decelerates, '23/24e-'25/26e EBITA down 1-3%; 7% CAGR '22-'25e. Keep HOLD, TP SEK 205 (210).

1% adj. EBITA miss on lower org. growth

Serial acquirers: Strong, but trending down

Higher expectations this time around, deceleration visible. '23e-'25e EBITA up 3-4% (FX 3%, M&A 1%), EPS up 2-3%. We remain neutral-to-slightly negative: LIFCO up to HOLD (Sell).

Good to Great

Impressive across the board, 15% beat, '23/24e-'25/26e EBITA up 11-10%, strong momentum into H2, deceleration and valuation are main risks. Keep HOLD, TP SEK 205 (185)

15% beat, strong across the board