Consti - Delivering as expected, plus some more

Q1 figures were above our estimates

Consti's net sales in Q1 amounted to EUR 68.9m, above our and consensus estimates (EUR 62.5m/62.3m Evli/cons.), with impressive growth of 15.2% y/y. EBIT amounted to EUR 0.7m, also above our and consensus estimates (EUR 0.5m/0.5m Evli/cons.). The company’s order intake was particularly strong at EUR 58.6m (Q1/22: EUR 37.6m), up by 56.1% y/y. Due to strong order intake, the company’s order backlog continued its growth and was at EUR 253.8m (Q1/22: EUR 205.1m).

Slight adjustments to our estimates for FY 2023

Due to strong growth witnessed in Q1, we have revised our revenue estimates slightly upwards to EUR 328.2m for 23E (prev. EUR 315.2m). Despite the strong growth for both revenue and backlog, based on management comments, it seems that the company has not yet filled up its schedule for the next 9 months, and therefore is needs to succeed in project sales to secure volumes for the remainder of the year. The current cost inflationary environment still affects the company through higher construction and indirect costs. Additionally, salary expenses will increase during Q2 2023. In light of these cost pressures, our estimate for the company's EBIT margin has been lowered to 3.8% (prev. 3.9%), even though the projected volumes are higher. Overall, we anticipate EBIT of EUR 12.4m (prev. EUR 12.3m) for FY 2023, which falls within the company's guidance range of EUR 9.5-13.5m.

BUY with TP of EUR 14.0 (14.0)

We have made only small adjustments to our estimates. Our view remains unchanged, we continue to see the company’s valuation undemanding. Based on our estimates, Consti trades with 23E EV/EBIT and P/E multiples of 7.2x and 10.2x offering a significant discount compared to both the Construction and Building Installations and Services peer groups. We retain our BUY rating and TP of EUR 14.0.