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Awardit: Beating expectations again - ABG

Sales +7% and EBITA +32% vs. ABGSCe
We raise ’22e-‘23e EBITA by 7% and 8%
19x ‘22e EV/EBITA – 30% EBITA/share CAGR ’19-‘24e

Strong momentum in Q4 looks to continue in Q1
Q4 sales increased 160% y-o-y (+7% vs. ABGSCe) driven by 43% organic growth (+4pp vs. ABGSCe), and M&A contributions from MBXP, TIC and Prämie. Organic growth in Jan was 54%, suggesting more strong growth in Q1. We forecast 32% organic growth in Q1’22, but tougher comps mean a slowdown in subsequent quarters. Adj. reported EBITA was SEK 48m (+32% vs. ABGSCe), mostly from higher-than-expected margins from the acquired units. It benefited from integrating Prämie in Dec, a month that accounts for a large amount of annual EBITA, so we have not extrapolated the Q4’21 EBITA margin. Also, we remain positive about Zupergift’s potential, which had sales of ~SEK 100m in 2021. The breakage in Q4’21 was SEK 3.8m. It has just started to market the product to retail (mainly B2B sales so far). Also, Zupergift was recently launched in Norway and we expect a launch in Denmark and Finland. Furthermore, the integration of TIC is progressing well (several clients migrated to the Awardit platform already), and a project was initiated to identify synergies and cross-selling opportunities with Prämie in the quarter.

Solid organic growth and high cash conversion in 2022
We raise ‘22e-‘23e sales by 3% and 4% on a better growth outlook while costs are relatively flat, leading to 7% and 8% higher EBITA. In ‘22, we expect 12% organic growth and a 13.4% EBITA margin. Also, we expect it to convert 75% of EBITDA to FCF in ‘22 (see page 3).

Much more growth to come, both organically and with M&A
We continue to see several interesting growth drivers for the company, in both existing verticals but also new areas where gift cards can be used. For example, it has projects with insurance firms and payment apps, and we expect to hear more about them this year. Also, we continue to see opportunities for Awardit to consolidate the
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