Careium: Cash flow relief - ABG

Decent Q1, continuing to improve margins y-o-y
'23e-'25e adj. EBITA up 4-3% on tweaked margins
Strong FCF of SEK 28m likely a relief for investors


Q1: margin stable from Q4 levels, CF finally strong

Careium delivered decent organic growth of 8% (ABGSCe 6%), driven by strong UK & Ireland product sales growth of 84% coupled with 10% service growth in the Nordics. Opex was -4% lower than we expected on improved cost control, resulting in a solid beat versus our expectations on adj. EBIT. The number of connections decreased by 6% y-o-y, mainly on lost UK contracts, but keep in mind that Carium is prioritising securing profitable connections that should support margins in the service business going forward. While we are encouraged by the cost control, which held the adj. EBIT margin largely in line with the strong Q4 turnaround, the most important item in the report was the SEK 28m in FCF after three quarters with significant burn rate.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2023/4/careium---cash-flow-relief-/