Fortnox
Fortnox - Focus on getting the last pieces in place (ABG Sundal Collier)

2021-10-13 11:54
Q3e sales of SEK 238m and EBIT of SEK 90m
Slightly lowered sales assumptions for Q3
Promising Q4 outlook, ’22e-’23e EV/EBIT of 62-43x
We expect a solid Q3…
In our view, Q2 was a step in the right direction for Fortnox, with 16% organic growth q-o-q in transaction-based sales (vs. -17% in Q1). Its customer intake continued to be strong (+15,000 q-o-q vs. +13,000 in Q2’20), and its recent internal projects entered their final stages. In Q3, we expect flat sequential transaction-based sales, but see solid growth in subscription-based sales, which gives total sales of SEK 238m, up 36% y-o-y (22% organically). In terms of adj. EBIT, we expect SEK 90m (-3% vs. FactSet cons. SEK 93m), for a margin of 37.8% (vs. 47.1% in Q3’20). This corresponds to 10% adj. EBIT growth y-o-y, vs. +14% in Q2. As in Q2, the margin contraction stems from the fact that transaction-based sales have not yet fully recovered, coupled with increased investments in the internal platform, and margin-dilutive acquisitions.

…but an even stronger Q4
Although the internal investments finished in Q2, we are under the impression that this occurred late in the quarter, meaning in the middle of the summer. As the subsequent month is typically a holiday period, we believe that increased sales and marketing activities after the investments were done did not start until late August. Owing to this, we trim our Q3 sales estimate, resulting in -1% on ‘21e sales. For Q4, the outlook is bright. Further recovery in transaction-based sales together with recently implemented price increases (mainly for some of its analogue services, e.g. printed invoices) bode well for a re-acceleration in organic growth. We forecast Q4 sales of SEK 274m for organic y-o-y growth of 31%.

Positive momentum to continue in 2022
We also expect the positive momentum to continue in 2022, where we see sales of SEK 1,279m and EBIT of SEK 479m. At today’s share price, this corresponds to 23x EV/sales and 62x EV/EBIT. After a period of deceleration in b
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Fortnox - I dag

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