Sales and EBIT in line with our forecasts

We raise ‘20e EBIT by 26%

21x ‘20e EV/EBIT, 12% ‘19-‘22e EBIT CAGR

Better-than-expected order intake and gross margins
Pricer had a solid Q2. While sales of SEK 288m (+6% y-o-y) were largely in line with our forecast of SEK 298m, order intake of SEK 324m (+41% y-o-y) represented a 30% beat over our SEK 249m. Pricer stated that although April and May were weak months, June saw a significant recovery, which we think the underlying order intake (i.e. order intake excl. announced orders) of SEK 174m (flat q-o-q) demonstrates. As expected, the Q2 gross margin of 22.9% (vs. ABGSCe 21.0%) was hurt by increased freight costs and an unfavourable sales mix. Due to the lower gross margin and the fact that Pricer has not received any gov’t grants nor initiated any cost-saving actions, EBIT was SEK 3.5m (vs. SEK 34m in Q2’19).

‘20e EBIT up by 26% on higher gross margin assumptions
We believe that the majority of the end-of-Q2 order book of SEK 903m will be delivered in H2’20 and therefore see strong sales growth in the coming quarters. Although recent FX movements have been unfavourable, we raise ’20-22e sales by 1-6% in light of the stronger-than-expected order intake. Furthermore, we think that the gross margin beat of 2.9pp implies higher gross margins for the Best Buy orders than previously anticipated. We thus raise our ‘20e EBIT by 26% on the incorporation of higher assumptions for these sales.

Well-positioned to pursue growth opportunities
We believe that Pricer’s strong market position and robust balance sheet will help the firm remain on its growth trajectory in the coming years. We like the fact that Pricer has recently emphasised its software sales focus, and think that this initiative could result in expanding margins. Pricer’s share is trading at 21x EV/EBIT and a P/E of 23x on our ‘20 estimates.

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