Briox - Feedback from ABGSC Investor Day

New CEO explained the strategy ahead Much focus remains on the accounting agencies Briox benefits from the industry’s ongoing transformation CEO Johan Nordqvist clarified Briox’s strategy going forward Yesterday, Briox’s CEO Johan Nordqvist (who has now been the CEO for about 6 months) presented at our ABGSC Investor Day seminar. Much of the discussions were around the company’s strategy going forward, where the firm’s primary focus is to sign on accounting agencies that in turn upsell Briox’s product to their own customers (i. e. the end users).

If such model is well executed, we argue that it is a very scalable and efficient sales model, given that marketing costs and client management costs with adding new end users are low. Opex should remain at similar levels in the near term Today, Briox has +170 agencies on board, but Mr. Nordqvist emphasised that in order to make sure that the accounting agencies actually recommend Briox’s products to their own customers, he believes that the company must work more systematic ahead with the on board and follow up processes.

This is especially important in the Baltics, given that Briox is in a scale up phase in these countries. Even so, executing on this strategy should be possible with the current organisation, meaning that we should not expect any material opex increases in the near term. Bright future for firms that support the digital transformation The accounting industry is currently undergoing a transformation.

While some people argue that the industry’s future looks grim, Briox disagrees and says that the future looks bright if the industry can adapt. This means adding more digital solutions so that more focus can be on consulting services rather than on managing administrative tasks. We agree with this, and therefore estimate rapid sales growth for Briox over the coming years (54% 2019-2022e sales CAGR).