Litium: ABGSC’s Investor Days feedback - ABG
We hosted a presentation with CEO Patrik Settlin today
B2B and indexed contracts mitigate inflation woes
Profitability still in sight
A North American win
Today, we hosted CEO Patrik Settlin at ABGSC’s Investor Days. In the most recent quarter, Litium signed its first-ever North American customer – a distributor of construction materials. This win shows Litium’s ability to gain the confidence of international players due to its dynamic e-commerce offering, which allows players with an e-commerce presence to conduct business in a cost-efficient way, as compared to the offerings of larger, North American e-commerce giants, as explained by Patrik.
B2B exposure scares the ghost of inflation away
We discussed the impact of inflation on Litium’s business, and the CEO affirmed that the impact is evident, for instance in Litium’s B2C-exposed business. However, he highlighted that the B2B-exposed business is less affected. For instance, while Litium’s archetypical e-commerce customer base has generally been crowded by consumer-facing apparel brands, we now begin to see e.g. agricultural machinery businesses come into the spotlight as well. This is one of the examples that provides assurances regarding the inflation sensitivity of Litium’s customer base. Furthermore, Patrik emphasised that indexed price contracts with customers alleviate some of the inflationary pressures that Litium would otherwise have had to absorb.
CEO confident that profitability is in sight
Although consumer-facing businesses are struggling, Litium is guiding that it is on its way to achieve profitability, and that the current cash position can bridge the gap to profitability. We continue to forecast that Litium will become profitable in 2023e, on an adj. EBIT basis, and we consider the maintained guidance reassuring under the current circumstances.
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