* We see 3% organic growth in Q1, supported by cold January weather * Swedish and Norwegian earnings developing well, while Finland lags * Samuel Alteborg announced as new CEO starting in August
Q1 expectations
After returning to organic growth in Q4 (albeit barely), we expect the positive trend to accelerate in Q1 and forecast 3% organic growth, which should be supported by the cold January weather. The positive gross margin development should also persist into Q1, where we have 41.3% (40.9%). With the underlying cost base unchanged from H2, this leads us to an adj. EBITA margin estimate of 4.0% (3.3%).
Estimate changes
We only make very minor adjustments to our estimates. Sweden and Norway are developing in the right direction, but Finland will likely continue to underperform in the near term, at least until the cost reductions associated with the ended customer relationships announced last quarter take full effect in Q3.
Outlook and valuation
On 19 February, Alligo announced that it has found a successor to current CEO Clein Ullenvik in Samuel Alteborg, most recently CEO of Cramo, a rental company supplying machinery and equipment to both construction companies and industrial customers. Mr. Alteborg will take over the helm in August. Our initial take is that Mr. Alteborg's experiences seem highly relevant for his new role as CEO of Alligo, and look forward to hearing about his strategy for Alligo once he takes over. Our overall view of Alligo remains largely unchanged, as the company looks set to reap the rewards of an improving market over the coming years.