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.

M&A, healthcare and stability – up to HOLD

Up to HOLD (Sell), TP SEK 255 (235). '24e-'26e EBITA up 2-3%; 5% CAGR '23-'26e. Q1 report Thursday, 25 April.

Healthy healthcare offset deceleration

Strong Life Science activity, in-line earnings, '24e-'25e EBITA up 2%; 4% CAGR '23-'26e, keep SELL, TP SEK 235 (225).

Better orders, lower organic sales/EBITA

Serial acquirers: Slowdown caps upside

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

Downside risk following rerating

Down to SELL (Hold), TP SEK 225 (215), '23e-'25e EBITA down 0-3%; 7% CAGR '22-'25e, Q4 1 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.

Solid, but trending down

4% adj. EBITA beat, 3% org. sales, good FCF, '23e-'25e EBITA up 2-1%; 8% CAGR '22-'25e, keep HOLD, TP SEK 215 (225)

4% adj. EBITA beat with in-line org. sales

Heads-up for report 27 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).

Decelerating earnings, less backlog support

Q3 report due Friday 27 October. 2023e-2025e EBITA +1/0/-1%. Keep HOLD, TP unchanged SEK 225.

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.

Steady trading

1% adj. EBITA miss and in-line org. sales, '23e-'25e EBITA down 1-2% (FX neg. 1-3%). Keep HOLD, TP SEK 225 unchanged.

1% adj. EBITA miss, better orders and sales

Heads-up for report 20 July

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).

Declining orders, but solid organic earnings

Q2 report due Thursday 20 July. Q1 sales of SEK 8.0bn, +20% y-o-y, EBITA of SEK 1,226m, up 20% y-o-y. 2023e-2025e EBITA up 3-5%. Keep HOLD, TP SEK 225 (220).