Litium - Continued high e-commerce volumes in Q1’21e

Q1’21e ARR growth of 22. 7% ‘21e EBIT down by 1. 1% on lower gross margin Fair value range of SEK 17-39 (17-38) ABGSC Q1’21e ARR of SEK 53m, +22. 7% y-o-y We expect more solid growth in ARR in Q1’21, factoring in 22.

7% y-o-y growth, to SEK 53m. We believe that Litium will benefit somewhat from the increased volumes in e-commerce in Q1’21, although this is still a small part of Litium’s overall revenues, and it puts some pressure on the gross margin, as more traffic leads to higher COGS in the short term. We believe that Q1 will continue to highlight the scalability of Litium’s business model, which we saw throughout most of 2020, and we factor in an increase in opex of 9.

9% y-o-y in Q1, arriving at SEK -17. 6m. We estimate that this will yield an EBITDA of SEK -2.

6m, for a margin of -17. 5%, and EBIT of SEK -5. 0m.

Minor estimate changes on lower gross margin We only make small revisions to our estimates, lowering our gross margin for ‘21e by 0. 5pp, to 72. 5%.

This is mainly due to some of Litium’s customers experiencing increased activity on their digital commerce storefronts in Q1’21e, which in turn squeezes Litium’s gross margin in the short term, as the increased activity/traffic leads to higher COGS for Litium. However, this should normalize over time. Fair value SEK 17-39 per share, EV/ARR 5.

1-2. 9x ’21e-‘23e Slight adjustments bring our fair value range to SEK 17-39 (17-38) per share, mainly driven by multiple expansion of relevant peers. We also note that at the current share price, Litium is trading at an average EV/ARR of 5.

1-2. 9x for ‘21e-‘23e.