Reviewing Lifco's Q2 Performance

Far ahead of our expectations

1H: Stabilizing at high levels

As we’re working on our July deep dive, Lifco has just shared insights into its Q2 performance, which surpassed our expectations by a wide margin. We would summarize the quarter as follows: stabilizing 2-year stacked organic revenue growth while maintaining all-time high profitability.

While the construction market remains at low levels with no material change compared to the fall of 2023, Lifco’s most profitable subsidiaries continued to outperform in Q2.

Coupled with exposure to the defensive “Dental” and several parts of “Systems Solutions”, overall organic EBITA performance - while still down over the first six months of 2024 - has held up better than expected. But with shares at roughly 33-34x EV/NOPAT in FY24, mid-single-digit organic EBITA growth in the second half and a rebound in construction related activity seem to be priced in already.

Let’s review the quarter, conference call remarks, and our take on valuation/IRR.