StrongPoint
StrongPoint - Flying into Q3 (ABG Sundal Collier)

2020-07-03 07:40
Big order: 2020 sales and EBIT likely up +6% and +20%
High quality contract win: Effect from Q3
Adds confidence to its ambitious target
Key segment, Retail Technology, wins big order
Strongpoint announced after close yesterday an order of NOK 70m with NorgesGruppen, the largest grocery retailer in Norway, for delivery of electronic shelf labels (ELS) to 200 of its stores. StrongPoint will not disclose the EBIT impact, but we calculate the order to lift EBIT by NOK 8-10m for 2020. This is significant: ~6% of sales, ~10% of EBITDA and +20% on EPS. On top of the contract value, comes service and maintenance revenue over the coming years, i.e recurring revenue. The contract is for 200 stores, but could be increased. To put this in perspective: NorgesGruppen has~ 1.800 stores in Norway (note that StrongPoint has already worked with the Joker retail chain, ~470 stores)

High quality contract win - adds confidence to targets
On top of the order being significant, it highlights the strong relationship StrongPoint has with the largest grocery retailer in Norway. Furthermore, it also adds confidence to StrongPoints ambitious target: To grow revenues to NOK 2.5bn by 2025, which would correspond to a 15% yearly growth.

Materially earnings impact
Given the order, we calculate that clean 2020 clean EPS could be lifted from NOK ~0.9 to over NOK 1.0. This would give a 2020 PE below 12x. For 2021 the stock is trading at 9.4x.


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  • 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.

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ABG Sundal Collier - Introduce.se

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