Formpipe: More profit growth in '24e - ABG

Good ending to 2023 with strong margin improvements
We lift '24e-'25e EBIT by 9-5% on lower opex
Share is trading at 23x and 15x '24e and '25e EV/EBIT


1% sales beat and better margins

Formpipe's focus on restoring profitability continued to yield results in Q4. The EBIT margin expanded to 13%, up from 4% in Q4'22 amid sales +7% y-o-y and opex -3% y-o-y. This was above our expected 9%, driven by slightly higher sales, lower opex, and higher capitalised development costs. The recently deteriorating (margin-dilutive) delivery revenues with Landbrugsstyrelsen remained a drag on top-line growth (c. -3pp impact on the y-o-y growth), though we expect this to stabilise and gradually recover towards H2'24. Meanwhile, SaaS ACV of SEK 11m (ABGSC SEK 11m) saw more sequential progress - despite a still-elevated churn - after the dampened activity in H1'23. This bodes well for more SaaS sales growth in '24.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/formpipe/Equity-research/2024/2/formpipe---more-profit-growth-in-24e/