Sales -1% vs. ABGSCe, adj. EBIT -15% vs. ABGSCe

Reduced 2021e EBIT, but minor changes on ’22e-‘23e

58x ‘22e EV/EBIT, 38% ’20-‘25e EBIT CAGR

Robust customer intake, but EBIT lower than expected
After 14 consecutive quarters of expanding adj. EBIT margins (y-o-y), Fortnox reported an adj. EBIT margin of 31.0%, representing a y-o-y margin contraction of 2.1ppt. This was explained by higher costs (opex +36% y-o-y) driven by the acquisition of Offerta as well as Fortnox’s new growth initiatives communicated at the CMD in January. We note that organic headcount growth was +36 q-o-q, while other external costs grew 99% y-o-y. Although sales of SEK 199m were in line with our forecast (-1% vs. ABGSCe, +23.5% y-o-y), costs were higher than expected, resulting in an adj. EBIT miss of -15%. Customer intake remained robust at 18,000 q-o-q (vs. ABGSCe 16,000). We estimate that the majority of this was organic, meaning that Fortnox’s goal of accelerating its customer intake is gaining ground.

Lowered ’21e EBIT due to higher cost assumptions
We keep our sales forecasts largely intact after the report, but reduce our underlying EBIT estimates due to higher cost assumptions. Fortnox recently announced the acquisition of Bolagspartner, which contributes with sales of roughly SEK 20m and EBIT of SEK 10m. As we also incorporate this into our forecasts, our total ‘21e EBIT is down 5%, while our ‘22e-‘23e EBIT is +0-1%, respectively.

Strong foundation for continued profitable growth
We reiterate our assessment that Fortnox has built a foundation for continued strong, profitable growth over the coming years. While we forecast margins contracting in ‘21e on higher costs and the acquisition of Offerta, we expect them to expand in ‘22e and beyond on operational leverage. Our 2025 EBIT forecast of SEK 1,315m corresponds to a ’20-‘25e EBIT CAGR of 38%. On our new 2022 estimates, Fortnox’s share is trading at 21x EV/sales and 58x EV/EBIT.

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