Sales & EBIT better than expected, but orders miss

We expect further gross margin pressure in Q4’21

28-14x ’21-‘23e EV/EBIT

Strong Q3 performance in Americas
Pricer delivered better Q3 results than expected. Sales of SEK 496m were 16% ahead of ABGSCe SEK 426m, corresponding to -12% y-o-y due to very challenging comps. While gross margins were pressured due to increased freight costs and an unfavourable customer mix (we estimate margin-dilutive Best Buy sales of SEK 70m in Q3), gross profit was 10% above our forecast, which led to a 38% EBIT beat. The outperformance in sales chiefly stemmed from Americas, where we understand that CTDA contributed well during the quarter. Orders, however, declined 30% y-o-y to SEK 307m (-15% vs. ABGSCe). We emphasise that Pricer did not announce any large orders in the quarter, while we estimate an underlying order intake of +12% y-o-y. Despite the miss versus our forecast, we think that this was a solid metric given that many customers are currently holding back investments due to the supply chain issues.

We cut ‘22e EBIT on lowered gross margin assumptions
We expect gross margins to be muted in Q4’21-Q2’22e, and reduce our gross margin estimates accordingly. As such, we cut our ‘22e EBIT by 6%, but raise ‘22e sales by 3% on the assumption that Carrefour will gradually start to place orders ahead. For reference, in November 2020, Pricer signed a framework agreement with Carrefour, but the customer has so far been quiet in terms of placing orders, which we believe is due to the company’s recent change of management. For ‘21e, we raise sales and EBIT by 3% and 5%, respectively, on the back of today’s beat.

21% EBIT CAGR for 2019-2023e
The share is currently trading at 19x ‘22e EV/EBIT on our estimates, while we forecast a ‘19-‘23e EBIT CAGR of 21%.

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