Pricer: Impressive EBIT despite soft sales - ABG

- Order intake +2% y-o-y on return of one key customer
- '25-'26e EBIT up 11-13% on higher gross margin
- Share trading at 8.5x '25e EV/EBIT

Soft sales and partial order recovery
Pricer delivered soft Q3 sales but another strong quarter for profitability. Sales were SEK 614m (-3% vs. ABGSCe), which is -1% growth y-o-y, but +2% y-o-y adjusted for FX. Sales were hurt by order delays from a key customer in France, while other regions performed well (sales +37% y-o-y ex France). In addition, Q3 delivered a weak but positive order intake of SEK 532m (3% y-o-y and -2% vs. ABGSCe). One of the two key customers that had delayed orders in Q2 returned as expected in Q3, and we expect a positive effect on order intake from the other customer from Q4. The gross margin improved to 22% (vs. 18% in Q3'23 and 23% in Q2'24) due to favourable product and customer mixes. We expect the customer mix to be less favourable in Q4, as the customer expected to return in Q4 tends to dilute the GM. Even so, we remain positive about the gross margin trend, but we expect a slight sequential decline in Q4. With the better gross margin and lower opex (-28% y-o-y due to recent cost savings), EBIT increased to SEK 63m (vs. SEK 12m in Q3'23 and SEK 49m in Q2'24).

Estimate changes
'24e sales are down by 0.3% following the slight sales miss and expected tough Q4 comps. We tweak '25-'26e sales by 0.1-0.4% after the report, and we increase gross margins by 0.3-0.4pp, resulting in changes to '25-'26e EBIT of 11-13%.

Positive earnings prospects
We estimate '26e sales of SEK 3.6bn, corresponding to a '24-'26e sales CAGR of 11%. Together with more gross margin improvements and declining opex, we expect Pricer to report 2024e adj. EBIT of SEK 189m - a sharp increase from the SEK 35m in 2023. The share is trading at 8.5x EV/EBIT on our updated 2025 estimates.

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