Formpipe: Continued margin improvements on the cards - ABG

Q2 report due on Friday 14 July
Estimates fine-tuned
Q2e EBIT margin of 6.7% (vs. 0.3% in Q2'22)


Q2 expectations

After Formpipe's poor margins in 2022, they started to recover in Q1, with an EBIT margin of 5.5% (vs. 2.9% in Q1'22). Although there is still a gap to the 2020 figure of 13%, we expect more margin improvements in Q2e (6.7% vs. 0.3% in Q2'22) from a lower personnel turnover, operational leverage on the improved sales (+11% y-o-y), and a better sales mix (lower delivery sales). In Public SE, we expect to see continued improvements from Formpipe's decision to change strategy and have an end-to-end offering. In Public DK, we note the easy comps, while we expect Private to show strong growth in recurring revenues (+23% y-o-y) on the robust ARR, albeit with headwinds from lower delivery sales (-27% y-o-y). Ultimately, we forecast Q2e sales of SEK 132m and EBIT of SEK 9m.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/formpipe/Equity-research/2023/6/formpipe---continued-margin-improvements-on-the-cards/