I-tech: Investing for greater profitability - ABG

Q4: sales SEK 25m,-16% y-o-y; EBIT margin of -1.9% (17.9%)
Costs temporarily higher, investing to increase gross margin
Q4 a temporary setback, long-term potential intact


Q4: A tough quarter

Q4 sales came in at SEK 25m, down -16% y-o-y (-15% org., -1% FX). EBIT was SEK -0.5m (5.4m) for a margin of -1.9% (17.9%), and net income was SEK -0.4m (4.4m) for a margin of -0.6% (14.4%). This converted into EPS of SEK -0.03 (0.37) and lease adj. FCF of SEK -1m (4m). The quarter was characterised by higher costs from pursuing additional suppliers, year-end bonuses (resulting from the high sales and earnings growth in '23) and non-recurring costs associated with ongoing EU regulatory procedures. Management explains that volumes in Q4 were affected by strong deliveries to customers in Q3 and customer inventory optimisation towards the end of the year. On the positive side, the company announced a dividend of SEK 1.5 for a yield of 3.4%, (of which SEK 0.75 extraordinary), putting some of its cash pile to good use.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/i-tech/Equity-research/2024/2/i-tech---investing-for-greater-profitability/