Q4 EBITDA SEK 1m vs. ABGSCe SEK 4m

We expect flat growth ’21e on Mobile uncertainty

DCF fair value SEK 0.72-2.75 (0.84-2.82) per share

Slight revenue and cost deviation lead to miss in Q4’20
Precise delivered a solid Q4’20 report where slightly higher than anticipated costs contributed to a large (percentage-wise) deviation to our EBITDA estimates. Net sales were SEK 23m, -4.2% vs. ABGSCe, evenly split between royalties and licenses (which now include support & maintenance revenues) for y-o-y growth of -42.0% on the very tough comparables from Q4’19 (Precise’s strongest-ever quarter). The rise in royalty revenues was primarily attributable to Egis Technology (mobile segment), an effect of Precise focusing on a larger collaboration with fewer customers. Operational costs were SEK -22m, vs. ABGSCe SEK -20m, mainly driven by higher selling expenses than estimated. Q4’20 EBITDA was SEK 1m vs. ABGSCe SEK 4m.

Egis Technology revenues remain uncertain in ‘21e
We’ve adjusted our growth estimates for ‘21e and now expect flattish growth (+4.6%); this is mainly because ‘21e revenues from Precises’ largest customer, Egis Technology, remain uncertain. Given that revenues are still mainly driven by the Mobile segment, this could have a large impact on revenues in the short-term. In the longer, term we hope to see a shift revenues such that the Digital Identity business can become a substantial part of revenues (Precise is attempting to do this). In Q4’20, YOUNiQ installations totalled 50 (up from 40 in Q3’20), and Precise entered into its first commercial agreement in the US with Clarkson University. In the short term, however, Precise will focus on furthering the roll-out of YOUNiQ in Sweden, and preparing for entry into neighbouring Nordic countries. Given that Precise assumed an annual income of SEK 35,000 per installation in its Digital Identity market estimates, it is clear that the segment is still a small part of the business.

Estimates drive new DCF range
Our DCF fair value rang
...

research@abgsc.com (Introduce.se)

ABG Sundal Collier - Introduce.se