Formpipe: Good growth, but weaker profits than expected - ABG

Sales 17% y-o-y but -4% vs. ABGSCe Expect negative estimate revisions on higher costs Share is trading at 21x ‘23e EV/EBIT on unrevised ests. Q2 results
Sales SEK 120m (-4.1% vs ABGSC 125m), EBITDA SEK 15m (-29.1% vs ABGSC 21m), EBIT SEK 0.4m (-95.0% vs ABGSC 8m). While growth was good at 17% y-o-y, sales came in -4% vs. ABGSC. This, in combination with slightly higher costs than expected, led to softer profits than our forecast.

Q2 thoughts Private continued on its strong growth trajectory, posting 16% growth y-o-y. Meanwhile, Public SE grew 32% y-o-y (mainly driven by M&A) and Public DK +8% y-o-y. Encouragingly, SaaS ACV was SEK 10m (ABGSCe SEK 8m), up from SEK 9m in Q2’21. On the negative side, the number of employees fell by 6 q-o-q. Furthermore, Formpipe gave an update on the potential spin-off of either of its units, in which it will keep the current structure going forward. We think that this makes sense, particularly considering recent market turmoil.

Estimate changes and valuation Formpipe’s share is 41% YTD and is trading at 21x EV/EBIT on our unrevised 2023 estimates. At a first glance, we would expect consensus to make relatively large EBIT cuts on ‘22e on the back of higher cost assumptions (c. 25%). For ‘23e, we expect EBIT estimates to come down high-single digit.

Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/formpipe/Equity-research/2022/7/formpipe---good-growth-but-weaker-profits-than-expected/