Loihde - Steady performance expected
Loihde reports its H1 results on August 27th. We expect slight net sales growth and a clear y/y profitability improvement. Of key interest in our view is the growth pace and potential remarks on recent or anticipated changes in the demand situation.
Year started of well…
Loihde reports its H1 results on August 27th. Loihde had an upbeat start to the year with both sales growth and profitability improvement, as net sales were up 6% y/y in Q1, while the adj. EBITDA improved to EUR 1.6m (4.9% of net sales) from EUR -0.1m in Q1/23. Growth was driven by Security Solutions and Cyber, Cloud & Connect, while the challenging market situation in IT consulting and digital development saw revenue decline in Digital Services and Data & AI.
… and looking at continued steady performance
Loihde expects revenue in 2024 to be on par with or grow y/y while the adj. EBITDA is expected to improve y/y, neither of which in our view appear unattainable without a larger demand deterioration. Loihde in conjunction with the Q1 report emphasized expectations of lower relative growth figures for the remainder of the year compared with Q1. We expect revenue growth of 2.1% in Q2 and a 1%p q/q improvement in the adj. EBITDA margin to 5.9%. We anticipate that the demand situation, which has varied across business areas, to have remained fairly unchanged based on the overall market activity. Of key interest will be any potential remarks on the demand outlook going forward, as lower utilization and billing rates in certain areas could provide margin upside if and when demand picks up.
HOLD with a target price of EUR 11.8
We have made no changes to our estimates ahead of Q2, noting only the EUR 1.00 per share dividend payment since our previous update. We retain our target price of EUR 11.8 and retain our HOLD-rating.