* Volumes pre-announced, sales +1%, EBIT -10% vs. ABGSCe
* Lower quarterly gross margin drives lower EBIT figure
* Positive on commercial vehicle sector recovery and pipeline
Q2 results
Sales fell 12% y-o-y and were 1% above our estimate. Annualised engine equivalents produced were 3.1m, falling 9% y-o-y (3% below our estimate due to rounding compared to the pre-announced H1 figure). Sampling cups sold decreased 12% y-o-y, and were also pre-announced. With a margin of 27.0%, 3.1pp below our estimate, EBIT adj. was 10% below our estimate, mainly due to a softer quarterly gross margin.
Estimate changes
The Q2 numbers in isolation imply EBIT adj. comes down 2%. Management expressed optimism as H1 production recovered from the H2'25 trough, and commercial vehicle sector demand has started recovering, citing global new orders being up 30% y-o-y. The company also reiterated that its pipeline of new installation opportunities remains strong.
Company valuation
Over the past three months, the share has returned +5%, compared to the +6% of the OMX Stockholm Allshare. The share is currently trading at 23x-14x '26e-'28e P/E, compared to its 10-year historical median of 22x-14x.