Pricer: Strong growth, but also higher costs - ABG

Sales +36% y-o-y, +12% vs. ABGSCe Gross margin pressure continues Cons. likely to raise sales but lower EBIT estimates Q2 results Sales SEK 530m (12.3% vs ABGSCe 472m), Gross profit SEK 88m (9.5% vs ABGSCe 80m), EBIT SEK -7m (vs ABGSCe 0m), PTP SEK -6m (vs ABGSCe -2m), EPS SEK -0.03 / share (vs ABGSCe -0.01 / share).

Q2 thoughts Like in previous quarters, orders of SEK 581m grew well (+42% y-o-y, -1% vs. ABGSCe) on the back of a strong ESL market. Here, we note that Pricer booked a SEK 90m order from Dutch supermarket chain PLUS retail in Q2. The gross margin of 16.6%, however, continued to see a sequential decline (18.0% in Q1) and came in slightly below ABGSCe 17.0%. The company continues to see a strong near-term outlook for ESL solutions, partly driven by the inflationary environment. Here, it says that the market growth is accelerating, which we find encouraging. Furthermore, it reiterates its 2025 target of SEK 4.5bn in sales.

Valuation and estimate changes Pricer’s share is -30% YTD and is trading at 14x ‘23e EV/EBIT on our unrevised estimates. Based on the Q2 results, we expect consensus to raise its 2023 sales estimates mid-single digit but reduce its EBIT forecasts on lower gross margin assumptions and higher opex forecasts.

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