Fortnox - Robust customer intake, but EBIT miss
Sales and adj. EBIT -1% and -15% vs. ABGSCe Offerta contributes with lower margins We expect cons. to cut underlying EBIT est.
by 5-3% Q1 results Sales SEK 198m (-0. 8% vs ABGSC 200m), EBITDA SEK 78m (-16. 8% vs ABGSC 94m), EBIT SEK 60m (-17.
3% vs ABGSC 72m), PTP SEK 59m (-17. 6% vs ABGSC 71m), EPS SEK 0. 76 / share (-17.
1% vs ABGSC 0. 92 / share). Q1 thoughts Q1 customer intake was 18,000 (ABGSCe 16,000), partly driven by the acquisition of Offerta (contribution not announced), but the underlying customer intake was likely solid.
ARPC of SEK 176/month was in line with our forecast, giving solid y-o-y sales growth of 23. 5%. That said, for the first time in many quarters, Fortnox reported an EBIT below our forecast.
Adj. EBIT was SEK 62m (-15% vs. ABGSCe SEK 72m), in which costs of SEK 1.
9m were acquisition related. As such, adj. EBIT margin was 31.
0% (vs. 33. 1% in Q1’20).
This was due to 1) the acquisition of Offerta, which holds lower margins, and 2) and increased personnel costs. For the latter, we note that headcount grew 87 q-o-q, of which we estimate an organic headcount increase of +37 people. Fortnox Finance accounted for 13% of sales and posted 20% growth y-o-y for a margin of 22%.
Fortnox Core saw sales growth of 23% y-o-y, reflecting a sequential slowdown in sales growth due to tougher comps (+24. 5% y-o-y in Q4). Fortnox cited that transaction-based sales continue to be burdened by the pandemic.
Valuation and estimate changes Based on the Q1 report, we believe that preliminary underlying forecast changes from consensus could be 5-3% on ’21-‘23e EBIT. It should be highlighted that Fortnox announced an acquisition yesterday, which saw 2020 EBIT of SEK 10m. Fortnox’s share is trading at 62x ‘22e EV/EBIT on our unrevised estimates.