Almost an EBITDA doubling y-o-y

Earnings momentum set to continue in Q4’20

Trading +20% below peers despite stronger growth

Strong numbers as expected
StrongPoint delivered a very strong Q3 report with EBITDA of NOK 35m, up 94% y-o-y. As we already expected a strong report, EBITDA was 1% better than our number. Sales was up 19% y-o-y and adj. EPS comes in at NOK 0.40, spot on our number. CF from operations was also strong at NOK 36m driven by strong underlying earnings, but also WC.

Key segments also better
The earnings mix is strong as the key segment, Retail Technology, delivers better revenue and EBITDA growth (84% of group EBITDA): Revenues up 14% y-o-y and 2% better than our number while EBITDA is 8% better than our number (NOK 2m). It is StongPoint’s Retail Technology business in Norway and Sweden that explains the strong numbers (driven by e-commerce and the ESL order in Norway with Norgesgruppen). The EMEA region, and Spain in particular, is suffering from COVID-19 and sales are down 46% y-o-y.

Earnings momentum set to continue
We expect the strong demand for e-com solutions to continue into H2’20 and 2021. Combined with the NOK 70m ESL order to Norgesgruppen and probably some easing of COVID-19 restrictions. Furthermore, StrongPoint says they are delivering Click & Collect solutions to key markets and several proof of concepts are progressing. The stock is trading at a’21e adj. P/E of 13.5x (adj. for depreciation of intangibles) + 20% discount to peers.

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