Loihde - Profitability developed favourably
Loihde’s Q3 saw adj. EBITDA improving 30% y/y, but was below our estimates, at EUR 2.9m (Evli 4.0m). Growth was flat y/y, with net sales at EUR 29.9m (Evli EUR 32.3m). Profitability development is expected to continue favourably also during the end of the year.
- Group results: Loihde’s net sales were slightly below our expectations. Net sales grew by 1% y/y to EUR 29.9m (Evli: 32.3m). The growth slowed down compared with H1 partly due to a lower impact of acquisitions but the market demand situation has also fluctuated, affecting the net sales development. Adj. EBITDA amounted to EUR 2.9m (Evli: 4.0m), reflecting a margin of 9.7%.
- Security Solutions (SeSo): Net sales came in somewhat below our expectations, growing by 1% to EUR 21.4m (Evli: 23.6m). Growth was anticipated to slow down compared with the clear double-digit figures during H1, with the lower impact of acquisitions. The uncertain market situation is also showing, with for instance the slowdown in the construction sector being one negative driver.
- Digital Development (DiDe): Net sales declined by 1% to EUR 8.5m and came in slightly below our estimates (Evli: 8.8m). The market demand has posed challenges for growth during this year, with the decrease in demand for software development having shown, although demand in other areas such as cloud services, data and analytics, and AI have supported net sales.
- 2023 guidance intact (revised on 22nd Aug): SeSo to grow by over 10% and DiDe to be flat or grow. Adj. EBITDA to improve from EUR 10.3m. Given the YTD adj. EBITDA of EUR 3.8m, the profitability guidance puts a lot of pressure on Q4.