Lower sales than expected but solid margins

New goals: 10% org. sales growth p.a., 10% EBIT margin

New financial goals could present upside to LT forecasts

Q1 details
Sales SEK 77.9m (-15% vs ABGSC 91.3m), adj. EBIT SEK 3.1m (-21% vs ABGSC 3.9m), PTP SEK 4.6m (+60% vs ABGSC 2.9m). Growth in the quarter was impacted by FX effects. Adjusted for FX and the divestment of ScheduALL (which was discontinued during the quarter), NETI saw 11.6% growth in Q1’21.

New financial targets announced
The highlight of this report was the divestment of ScheduALL. The operation was divested successfully, resulting in a SEK 35.9m net loss being recognized in the PnL, which was communicated in connection with the announcement of the deal. As such, the company took another step forward in the strategic plan to achieve profitable growth. The company also presented financial goals: average annual organic growth of at least 10% and an average annual EBIT margin of 10% until 2025. We believe that the announcement of financial goals further highlights the results from its strategic transition, and the increased transparency will likely be appreciated by investors. The EBIT margin target is pretty much in line with our expectations, but the growth target is significantly higher. We think that this indicates that management expects to ramp up the company’s growth rates significantly from historical levels.

Estimate changes
We do not expect consensus to make any substantial revisions to its near-term forecasts following the results. The long-term estimates, however, might be upgraded on the back of the new financial goals.

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