Generic: Q2 performance like clockwork - ABG

Two consecutive quarters with 47% y-o-y sales growth
We raise both sales and margin assumptions
‘22e EV/EBIT of 38.2x, div yield of 1.6%

Generic reported Q2 net sales of SEK 29.6m (20.2m), a second consecutive quarter with 47% y-o-y sales growth despite tougher comps than in Q1. It was 8% above our expectation. The impressive sales growth was achieved by a mix of onboarding new customers and increased transaction volumes from existing customers. EBIT was SEK 6.0m (+72% y-o-y growth), corresponding to an EBIT margin of 20.4% (17.4%). It was 20% above ABGSCe. Gross margin was in line with our expectation but the higher sales growth in conjunction with opex growth of only 8% y-o-y explains the deviation versus our forecast. Going forward we expect Generic to increase opex by over 10% y-o-y as management stated a need to recruit both salespeople and developers in the coming quarters.

The last couple of quarters have been transformative for Generic and the company has gained confidence from increasingly larger customers after it struck a deal with the Swedish Social Insurance Agency.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/generic/Equity-research/2021/8/generic---q2-performance-like-clockwork/