Careium: Strong sales but weaker profitability - ABG

Sales came in 3% above ABGSCe Normalised EBIT of SEK -6.9m (ABGSCe 1.7m) Trading at 9x ‘23e EV/EBITA on our current estimates Q2 outcome

Careium delivered sales of SEK 174.4m (+3% vs. ABGSCe 168.8m), -2% q-o-q and +4.4% y-o-y organically (ABGSCe 4.1%), driven by strong product sales. Service sales was largely in line with our expectations, and we note that the number of subscribers was flat q-o-q where we expected a net positive number of +5,000. Adj. EBIT including all one-off items reached SEK -6.9m (vs. ABGSCe 1.7m), for a margin of -4% (ABGSCe 1%, 1.7% in Q1’21) due to lower gross margin than expected which is explained by unfavourable sales mix and increased freight and component costs.

Estimate changes on isolated numbers On isolated numbers, ‘22e sales comes up 1% while reported EBIT improves significantly due to the non-recurring positive item. Adj. EBIT, however, comes down -64% on isolated numbers due to the gross margin which was below our expectations, but note that the margin in ‘22e is pressured where we expect a significant increase ‘23e onwards.

Valuation and conference call details On our pre-Q2 estimates, the share is trading at 9x ‘23e EV/EBITA. In addition, we expect more details about Q2 on the conference call at 1pm CET. Dial-in details: SE: +46 8 505 163 86, UK: +44 203 198 4884, US: +1 412 317 6300, PIN: 6840468#. Webcast: www.careium.com/sv-se/investerare. Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/careium/Equity-research/2022/7/careium---strong-sales-but-weaker-profitability/