Lagercrantz again reported solid figures with sales and EBITA slightly below our estimates. The EBITA margin was in-line with our estimates, sequentially down but stronger on a year to year comparison. The cash flow was strong as usual in the third quarter and we believe it is likely to continue to be strong in the quarters ahead as is normal for the company when organic growth slows.

Lagercrantz made four acquisitions during December of DP Seals, Material Handling Modules Europe, Suomen Diesel Voima and Nordic Road Safety. While DP Seals, MHM and Suomen Diesel Voima are typical Lagercrantz acquisitions in size and profile, we view Nordic Road Safety as slightly different as its larger and founded only seven years ago.

We reiterate our Base Case at SEK140 per share following the report. Lagercrantz continue to show solid EPS growth, and while we expect the organic growth rate to continue to be muted, we believe growth from acquisitions will continue to support solid growth ahead. With the positive share price development in the last months we think there is limited room for multiple appreciation ahead and that EPS growth will drive the stock price onwards.