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Third party research

Generic: Communication flows, margin grows - ABG

Generic Sweden

This is a third party research report and does not necessarily reflect our views or values

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* Gross margin at 45% (40%)* SaaS supports margins and outlook* Trading at ~11-9x EV/EBITA for '26e-'27eStrong margin improvementGeneric reported sales of SEK 44m, up 2% y-o-y (4% below ABGSCe), driven by: i) lower volume-based products (e.g. SMS), which are more seasonal, ii) global SMS termination, and iii) mix effects across segments. Despite this, the gross margin came in strong at 45% (40%), reflecting improved cost efficiency and price adjustments. The gross margin was also supported by a higher share of SaaS revenue. Adj. EBIT was SEK 9m (-1m vs. ABGSCe), representing 34% y-o-y growth, reflecting solid underlying profitability.SaaS strength supports long-term viewWe cut our sales estimates by 2-1% for '25e-'27e on the back of the report. We maintain a positive outlook for SaaS revenues, which we believe will continue to contribute to the gross margin improvement. Generic continues to show improved cost efficiency, and while no major investments have been announced, we expect continued platform development and scaling to strengthen customer relationships.Trading below peersGeneric is trading at ~11-9x EV/EBITA multiple for '26e-'27e, which is below peers at ~15-11x EV/EBITA for the same period. We also see upside potential from the broader rollout of RCS, enabling two-way communication. Combined with a strong track record, we believe these factors demonstrate that Generic remains a well-run business.
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