Vitec - Solid start to 2021 for Vitec

Q1 sales of SEK 373m, +21% y-o-y, +6% organic growth Q1 EBITA SEK 96m, +8. 6% vs. ABGSC, -8. 0% vs.

cons Preliminary ‘21e consensus EBITA revisions of +/- 1% Q1’21 details Vitec reported its Q1’21 figures today, which offered net sales of SEK 373m, +0. 5% vs. ABGSCe, +2.

0% vs. consensus, where approximately 83. 9% of revenues were recurring, -3.

1pp vs. ABGSCe. The recurring revenues grew by 23.

8% y-oy, of which 7% organically. On a group level this corresponds to a total y-o-y growth of 20. 8%.

Service and license revenues normalized compared to the elevated levels in Q4’20, which we expected given that Vitec’s recent acquisitions have had additional time to align their business models. Group EBITA amounted to SEK 96m, +8. 6% vs.

ABGSCe, and -8. 0% vs. consensus, for a margin of 25.

6%, +1. 9pp vs. ABGSCe, driven both by the stronger top-line but also by also by a temporary positive COVID-19 effects such as less business travel which boosted the EBITA margin by ~1%.

Acquisition related costs amounted to SEK 8m, SEK 1m below our estimate. As a such Group EBIT amounted to SEK 56m, +17. 4% vs.

ABGSCe. Ultimately Vitec reported an EPS after dilution of SEK 1. 21, +84.

3% y-o-y and +12. 2% vs. ABGSCe.

We expect +/- 1% consensus EBITA revisions We could see consensus making minor EBITA estimate revisions for 2021e of approximately +/- 1%. Final thoughts Vitec has had a strong beginning to 2021, and looking at the full year we expect Vitec will maintain a high pace of M&A. The company recently expanded its loan facility by another SEK 500m, now amounting to a total of SEK 1.

5bn. This is combination with the seasonally strong Q1 cash flow leaves Vitec well prepared to continue acquiring vertical software companies in the Nordics that fit its stated criteria.