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Third party research

StrongPoint: Better, but still not there - ABG

StrongPoint

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

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Q1: Sales 4% below, EBITDA NOK 10m vs ABGSCe of NOK 4m
Lower target range likely
EBIT estimates largely unchanged


Q1: EBITDA of NOK 10m vs ABGSCe of NOK 4m

Sales decreased 3% y-o-y, mainly driven by the large-scale ESL tag replacement in Norway last year, resulting in a 53% revenue decline. Total revenues came in at NOK 347m, -4% vs our NOK 362m. GP was -3% vs. our estimate, giving a GM of 42.2% (ABGSCe 41.5%). The gross margin improvement stems from growth in the Baltics, and by a gross margin improvement in Norway from low margins from the ESL tag replacement last year. EBITDA came in at NOK 10m vs. ABGSCe of NOK 4m, on NOK 10m lower opex. EPS came in at NOK -0.19 vs. ABGSCe of NOK -0.16. Cash flow from operations was weaker compared to Q4, at NOK 8m vs NOK 77m. Net debt came in at NOK 72m vs NOK 59.6m in Q4. On outlook: StrongPoint states that the overall market remains uncertain, but it remains "cautiously optimistic about short-term prospects". The company had disposable funds of NOK 85m in Q1. We reiterate that it should have sufficient funds short term, but it may be more challenging medium term if the market situation persists.
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