Litium
Litium - Solid finish to tumultuous H2’19 (ABG Sundal Collier)
2020-02-21 09:24
Q4’19 ARR of SEK 42m, -0.2% vs. ABGSCe
New CEO Patrik Settlin assumed his duties on 10 Feb.
Adjusted DCF range, SEK 9-22 per share
Net sales +21.3% y-o-y, 94.7% recurring, +2.2pp y-o-yLitium’s Q4’19 report saw a return to q-o-q growth for Annual Recurring Revenue, (“ARR”), where reported ARR was SEK 42m, -0.2% vs. ABGSCe, and constituted q-o-q growth of 7.0% and y-o-y growth of 30.8%. Seasonally, Q4 is a strong quarter for Litium, where events like Black Friday and the Christmas period drive sales through increasing volumes on Litium’s end-customer commerce platforms, but also through revenue share agreements with technology partners like Klarna. Operating costs were slightly higher than we had expected, at SEK 14.6m vs. our estimated SEK 14.0m. This caused a slight EBIT miss, where reported EBIT came in at SEK -2.6m compared to our estimate of SEK -1.7m.
New CEO and CFO now in place; focus can return to growth
With Litium’s new CEO Patrik Settlin now having assumed his duties, officially, we believe that Litium can once again focus all of its attention on enhancing the success of its customers through its flexible and attractive commerce solution, which we believe will yield enhanced growth in the future. We view the slight stutter in Q3’19 – where ARR growth was flat q-o-q – as a one-time occurrence, and looking at ‘20e we expect total ARR growth of 38.5% y-o-y, which is slightly above Litium’s stated financial target of growing ARR by at least 30% per year. Litium has also stated an ambition of reaching profitability in ‘21e, if it makes sense when considering possible growth investments, and our estimates suggest that Litium will reach an EBIT margin of 9.2% in ’21e.
ARR CAGR 34.5% ’19-‘22e, EBIT margin 9.2% ‘21e
Based on our adjusted estimates, our DCF indicates a fair value range of SEK 9-22 per share (9-23). Further, by discounting our ’22 estimates by a WACC of 13.0% and applying the applicable peer group median multiples, we find a fair value range of SEK 10-21 pe
...
- Läs mer på Introduce
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
info@introduce.se (Introduce.se)
ABG Sundal Collier - Introduce.se