Formpipe - Adj. numbers largely in line with expectations

Adj. sales +2% y-o-y, but -4% vs. ABGSCe Strong ACV growth for Private, but Public SE hampers Expect cons. to lower its ’21-’23 EBIT estimates Q2 results – positive non-recurring item of SEK 25.8m Adj.

sales SEK 102m (-4.3% vs ABGSC 107m), EBITDA SEK 58m (198.4% vs ABGSC 19m), EBIT SEK 30m (423.3% vs ABGSC 6m), Adj. EBIT SEK 4m (-31.9% vs ABGSC 6m). In the quarter, FormPipe sold purchase rights to Landbrugsstyrelsen worth SEK 41m, which, post D&A effects, gave a positive PnL effect of SEK 25.8m.

Adjusting for this, sales and EBIT were a tad below our forecasts. Private continues to perform well Recurring revenue were SEK 68m (-1% vs. ABGSCe), corresponding to y-o-y growth of 9.6%.

Private had a good quarter, with 20% sales growth y-o-y coupled with an impressive ACV of SEK 7.5m. As such, its strategy with an intensified focus on Private is, in our view, progressing well. Public Sweden, however, had a softer quarter, with -7% sales growth y-o-y, which consequently hampered the group’s top line (and EBIT).

This was in line with Q1 trends. Going forward, the company wants to continue to recruit new employees for its Public segments. Estimate changes and valuation On a preliminary basis, we expect consensus to lower its ’22-‘23e EBIT estimates mid to high single digits on the weaker-than-expected Q2 results.

FormPipe’s share is down 22% over the past 3 months and is trading at 20x ‘23e EV/EBIT on our unrevised estimates..