Pricer: Market continues to flourish - ABG

Q1 due Tuesday 25 April, 08:30 CET
We expect strong orders but weak EBIT
We reduce '23-'25e EBIT on higher opex and lower GMs


Pricer operates in a strong market

The ESL market continues to see tailwinds from labour shortages and retailers looking to update prices more frequently given the current inflationary environment. Although comps are tough, while the firm has not announced any orders in Q1 (although it has announced several significant framework agreements), we expect orders of SEK 613m, up 11% y-o-y. ESL e-paper supplier E-ink eyes double-digit growth rates in 2023, which we also see given our ‘23 order forecast of +18% y-o-y. That said, we note that E-Ink's production data has recently slowed down, which we expect to weigh on Pricer's Q1 sales, where we see a figure of SEK 532m, +14% y-o-y (vs. +43% y-o-y in Q4). Although freight rates are down 85% from the peak while costs for electronic components have declined amid an improved supply chain situation, we expect gross margins to remain under pressure in Q1, as Pricer is currently prioritising growth over profitability. We expect a gross margin of 15.3% vs. 15.5% in Q4. In terms of EBIT, we see SEK -21m (vs. SEK -10m in Q1’21), which suffers from rising opex (+9% y-o-y) and gross margin pressure.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/pricer/Equity-research/2023/4/pricer---market-continues-to-flourish/