Vitec - Vitec beats estimates in Q4’20

Q4 sales of SEK 362m, +22% y-o-y, +7% organic growth Q4 EBITA SEK 98m, +23% vs. ABGSC, +17% vs. cons Positive prel. ‘21e consensus EBITA revisions of 5-6% Q4’20 details Vitec reported its Q4’20 figures today, which offered net sales of SEK 362m, +7.

5% vs. ABGSCe, +10. 4% vs.

consensus, where approximately 79% of revenues were recurring, -6. 4pp vs. ABGSCe.

The recurring revenues grew by 20. 4% y-oy, of which 7% organically. On a group level this corresponds to a total y-o-y growth of 21.

6%. Service revenues were higher than expected at SEK 60m, +42. 1% vs.

ABGSCe, +39% y-o-y, while Other revenues were, as expected due to cancellation of one-time revenues, lower than 2019. Comparables will ease starting in Q1’21 in terms of Other revenues. Group EBITA amounted to SEK 98m, +22.

8% vs. ABGSCe, and +16. 6% vs.

consensus, for a margin of 27. 1%, +3. 4pp vs.

ABGSCe, driven both by the stronger top-line but also by lower personnel costs than we had estimated. Acquisition related costs amounted to SEK 2m. As a such Group EBIT amounted to SEK 65m, +32% vs.

ABGSCe. Ultimately Vitec reported an EPS after dilution of SEK 1. 41, +177% y-o-y and +20.

4% vs. ABGSCe. We expect 5-6% consensus EBITA revisions We could see consensus making positive EBITA estimate revisions for 2021e of approximately 5-6%.

Final thoughts Vitec weathered a stormy 2020 relatively well given the nature of the company’s products and the recurring nature of its revenues. Meanwhile we think management proved that they’re fully capable on keeping a high pace in terms of M&A through solely digital channels, and we expect the pace to continue throughout 2021 given recent additional funding.