Careium: Small streams make great rivers - ABG

Q1: growth recovery and margin improvements with solid FCF
We tweak our '24e sales and adj. EBITA estimates
Share is trading at 8.6x '24e EV/EBITA adj.


Significant adj. EBITA growth on margin improvements

Careium delivered a stable top-line in line with our estimates following somewhat recovered organic growth, and we estimate an acceleration throughout '24e to reach 13% for the full year, i.e., in the middle of the guidance range of 12-15%. Product sales are up 8% y-o-y compared to -11% in Q4'23, mainly on returned product demand in the UK and Ireland (+39% y-o-y, corresponding to 62% of total product sales) which improved in the latter part of Q1 which is encouraging for the trend into Q2. Adj. EBITA increased by 83% y-o-y, from SEK 12m to 22m, mainly driven by gross margin improvements on a favourable mix of both product/services and geographical split, as well as improved efficiencies in service delivery, as opex came up 4% y-o-y.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2024/4/careium---small-streams-make-great-rivers/