StrongPoint: Weak report, '25 ambitions set to be revised - ABG

Q4: Clean EBITDA NOK -2.7m - soft compared to our NOK 0m
Customer postponing investment hitting profitability
2025 ambitions under pressure, set to be revised


Q4: Clean EBITDA of NOK -2.7m vs ABGSCe NOK 0m

StrongPoint's Q4 was another soft quarter, with sales down -18% y-o-y. The market is still challenging as customers are still postponing and delaying orders. Total revenues came in at NOK 331m (-4% vs ABGSCe). Revenues from Noway were down 30% while revenues from Sweden were down 14% y-o-y, respectively. COGS came in slightly higher than our estimates, giving a gross margin of 40.0% vs our estimate of 40.5%. Higher personnel expenses is still affecting the company, especially in Sweden and the Baltics where most of its employees are located. Additionally, the company had NOK 6.7m in one-offs related to restructuring costs, and NOK 11.3m related to other non-recurring costs. This resulted in a clean Q4 EBITDA of NOK -2.7m (reported NOK -20.6m) vs. ABGSCe NOK 0m, down from NOK 34m in Q4'22. EPS came in at NOK -0.65 (adj. EPS NOK -0.59) vs ABGSCe NOK -0.29. Cash flow from operations was stronger compared to Q3, at NOK 33.6m vs NOK -24.5m, mainly driven by lower working capital. This gives net debt of NOK 80.8m vs NOK 92m in Q3. Due to the negative EBITDA, the company is in breach with covenants, but has agreed with the bank to postpone the covenant reporting until Q4'24.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/StrongPoint/Equity-research/2024/2/strongpoint---weak-report-25-ambitions-set-to-be-revised/