Following the lower number of licenses sold, we reduce our assumptions for the number in 2020-2022e. As a result, we cut 2020e sales by 5%, and 2021e and 2022e sales by 13% and 7% respectively. Furthermore, we believe that Briox has reached a sustainable fixed cost base for the short and medium term, and we therefore lower our opex estimates for ’21-‘22e.
Improved sales contribution from Latvia & Lithuania in 2021e
Given the firm’s solid growth for its sold licenses in recent years (now at 6,185 vs. 3,054 in Q2’18), we think that Briox has validated its product offering. Now, we believe that Briox needs to enhance its sales efforts to close the gap between where it is today and reaching FCF break-even. While the company has an established brand in Finland and Estonia, the sales contribution from Latvia and Lithuania is low so far, but we believe that this will improve in 2021e. On our new estimates, Briox’s share is trading at 100-33x 2020-2022e EV/sales.
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