Q1: ARR SEK 65.5m (-0.7% vs ABGSC 65.9m), Sales SEK 15m (-2.8% vs ABGSC 15m), EBITDA SEK -1.5m (vs ABGSC 0.1m), EBIT SEK -4.6m (-78.9% vs ABGSC -2.6m), Net profit SEK -4.6m (-78.8% vs ABGSC -2.6m). Strong ARR growth +19% vs ABGSC 20%, despite external factors in the quarter. Although the EBITDA was negative, while we expected break-even in the quarter, the EBITDA has improved y-o-y (SEK -3.2m in Q1’21).
Q1 thoughts
The Q1 report was overall in line with our expectations, even though Litium was affected by the external factors, such as inflation on the back of the war. The inflation decreases the activity among the customers which indirectly affects Litium’s ARR. However, the ARR growth was still strong at +19% (the average growth the last 5Y is 33%). Although we had expected a break-even EBITDA in the quarter, we continue to see sequential improvements, a trend we expect to continue going forward.
Estimate revisions and valuation
At a first glance, we would expect consensus to make relatively small forecasts changes to its ’22-’23 estimates. The share is -16% YTD (while OMXS PI is down 19%) and is trading at EV/ARR of 2.8x-2.4x for ‘22e-‘23e on our unrevised estimates. Litium has a webcast today at 10:00 CET where management will present the Q1 report and host a Q&A session.
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