Safeture - Strong ARR growth for Safeture in Q1’21

ARR SEK 27m, +1. 3% vs. ABGSCe, +41. 8% y-o-y Estimate changes on the back of Q1’21 report EV/ARR of 10.

3-5. 3x for ‘21e-‘23e on ABGSCe ARR growth in Q1 driven by new customer intake Safeture reported strong ARR growth in Q1’21, which we think was driven mainly by new customer intake (the largest contributor in terms of new customers was Insured Nomads in the US) and very low churn of ~1%, as management reports that markets have begun picking up speed after COVID-19 headwinds in ‘20. ARR was SEK 27m, +1.

3% vs. ABGSCe, for y-o-y growth of 41. 8%.

Operational costs were SEK -14m, 4. 9% below ABGSCe and up ~32% y-o-y. This was mainly due to the accelerated investments into building the sales and marketing teams that took place throughout 2020.

With the teams now in place, we expect that the leverage of Safeture’s business model will shine through in 2021 and onwards. In terms of profitability, EBITDA was SEK -6m, +9. 6% vs.

ABGSCe, and EBIT was SEK -7m, +2. 9% vs. ABGSCe.

Estimate changes driven by report Our estimate changes are driven entirely by the Q1’21 report, where reported net sales were the key factor. In terms of our 2021 outlook, we believe that following the recent directed share issue of SEK 39m, Safeture stands ready to continue its focus on driving new customer intake. Given the investments into the sales and marketing teams in 2020, we believe that the leverage within Safeture’s business model will become increasingly evident.

Valuation slightly above peers in terms of EV/ARR At the current share price and based on our updated estimates, we find that Safeture is trading at an EV/ARR of 10. 3-5. 3x for ’21e-’23e.

See p. 7 for a peer comparison in terms of valuation and operative performance.