Receives SEK 100m order from PLUS Retail

We raise ‘20e sales and EBIT by 5%, respectively

25x ‘21e EV/EBIT on today’s share price

Receives SEK 100m order for delivery in Q2’20-Q1’21
In conjunction with a signed framework agreement with Dutch retail company PLUS Retail (PLUS) on 7 May, Pricer announced today that it has received a SEK 100m order from this firm. PLUS is the Netherland’s fourth-largest food retail company, and had a ~7% market share in 2019. Delivery is expected during Q2’20-Q1’20, with peak delivery in Q3’20. We estimate that the order involves delivery to ~160 of the retail firm’s 265 total stores, meaning that there is a high likelihood of further order announcements from this customer.

Pricer Plaza already gaining traction
Our forecast for the Q2’20 order intake was SEK 103m prior to this announcement. Incorporating the order into our estimates, we raise Q2’20e order intake to SEK 174m, and ‘20e sales by 5%. Although these details have not been disclosed, we estimate that the order carries group-dilutive gross margins due to a relatively competitive procurement process. In addition, we note that the order also includes delivery of Pricer’s recently launched software platform (Pricer Plaza), which we believe means lower initial gross margins. However, it should be noted that the software element also entails an element of recurring revenue, which in turn increases long-term profitability (i.e. gross profit) from this customer. We thus raise ‘20e EBIT by 5%, and ‘21e EBIT by 10%.

Pricer remains well-capitalised
Despite COVID-19 taking a heavy toll on retailers in 2020, we argue that the order suggests strong underlying demand for retailers to digitalise their businesses. We reiterate our previous assessment that Pricer will perform relatively well versus competitors amid COVID-19, owing to its robust balance sheet and positive cash flows, which its competitors lack. On our revised estimates, Pricer’s share is currently trading at 29x ‘20e EV/EBIT and 18x ‘
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