Careium - Q3 first take - ABG

Q3 well above our expectations, mainly on margins
Weak CF driven by WC tie-up
Share is trading at 5.3x '24e EV/EBITA on our pre-Q3 ests.


Q3: solid top line and continued margin improvement

Careium delivered sales of SEK 217.3m (+1% vs. ABGSCe 215m), +1.6% q-o-q and +23.5% y-o-y organically ex. FX (ABGSCe 17%). Looking at the segment split, product sales was SEK 58.1m, and service sales was SEK 159.3m, driven by a net win of service contracts, and stronger demand for hardware, especially in the Nordics, Germany and France. EBIT reached SEK 20.7m (+53% vs. ABGSCe 13.5m), for a margin of 9.5% (ABGSCe 6.3%, 6.8% in Q2’23), driven by continued significant efficiency improvements across the board, mainly regarding lower delivery costs as well as FX tailwinds regaring the GBP and USD. GM improved to 43.5% (+1.2pp vs ABGSCe, +1.4pp q-o-q and +8.4pp y-o-y), while OPEX also came in slightly better at SEK -73.9m (-4% vs. ABGSCe -77.4m), driving the EBIT beat.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2023/10/careium---q3-first-take/