Consti - Focus on order intake

Consti reports its Q2 results on July 21st. We anticipate continued y/y growth and expect profitability to stay at a similar level compared to the previous year despite increased volumes, due to expected cost inflationary pressure. We see the Q2 order intake development crucial for H2 volumes.

Expecting a solid Q2, focus is on order intake development

We estimate net sales of EUR 79.8m for Q2, with 9% y/y growth. The estimated continued growth is driven by the Housing Companies and Corporations segments. In terms of profitability, we estimate EBIT of EUR 3.1m with similar profitability levels when compared to last year despite higher volumes given the cost inflationary pressures in materials and personnel expenses. Besides the figures, our attention is on the order intake development. With the end of Q1 backlog being more evenly distributed across subsequent years, new orders are necessary to fill the volumes for the remainder of 2023.

Overall construction market outlook remains gloomy

The construction market is expected to slow down in 2023 driven especially by the residential new construction market. The renovation construction market is still expected to experience slight growth during 2023 driven by the need-based nature of the segment. While the renovation construction market typically operates differently, the notable decline in the new construction market may impact renovation construction to some extent. Some of Consti’s customers have already publicly announced delays and postponements of renovations and other repairs driven by the increased interest expenses and other costs. Although the market outlook remains gloomy, we haven't adjusted our estimates. However, the recent news flow has drawn greater attention into the order intake development. The development in the housing company segment is of key interest as the future outlook should be clearer after H1.

BUY with TP of EUR 14.0 (14.0)

We continue to see the valuation of Consti undemanding. The company trades at 8.8x P/E and 6.1x EV/EBIT on our 2023 estimates which offers a significant discount to both the main peer companies (Table 1) and Consti’s own historic multiples.

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