Formpipe: Continues to display rapid growth - ABG

Sales +19% y-o-y, +1% vs. ABGSCe…
…but a weaker margin than expected due to higher costs
Expect cons. to make relatively small forecast changes

Q1 results
Sales SEK 120m (1.2% vs ABGSC 119m), EBITDA SEK 17m (-22.2% vs ABGSC 22m), EBIT SEK 4m (-60.4% vs ABGSC 9m), Adj. EBIT SEK 4m (-60.4% vs ABGSC 9m). Sales grew 19% y-o-y, of which Private 23% y-o-y, Public Sweden 12% y-o-y, and Public Denmark 21% y-o-y.

Q1 thoughts
Formpipe continues to report strong sales growth in all three segments, where we are particularly encouraged that Public Sweden continues to deliver positive growth after a period of negative growth. The most important metric to track is ACV as it drives future SaaS sales. In Q1, Formpipe reported SaaS ACV of SEK 6.7m (ABGSCe SEK 7.2m), up from SEK 4.5m in Q1’21. The company says that although the recent situation in Ukraine is impacting its underconsultants in that country, these are currently working from safe places. Furthermore, increased costs that are entailed with its 2025 strategy continue to pressure margins.

Estimate changes and valuation
At a first glance, we would expect consensus to make relatively small forecasts changes to its ’22-’23 EBIT. Formpipe’s share is -25% YTD and is trading at 25x EV/EBIT on our unrevised 2023 estimates.
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