Adj. sales up 2% y-o-y but -4% vs. ABGSCe
There were two key areas worth emphasising in FormPipe’s Q2 report. First, in light of its intensified growth focus, Private saw 20% y-o-y growth coupled with a very strong ACV of SEK 7.5m (vs. SEK 4.6m in Q1 and SEK 3.1m in Q2’20). Second, the company has recently sold the product rights for its TAS product to the Danish Agriculture agency (Landbrugsstyrelsen), which gave SEK 41m gross proceeds to net sales and SEK 29m to EBIT. As the product was already mainly concentrated on Landbrugsstyrelsen, not only did the transaction entail a solid contribution to earnings, but it also freed up resources to use in other, more scalable projects with better growth outlooks. As such, we can see the benefits of the agreement. Adjusting for this, sales were SEK 102m (-4% vs. ABGSCe), up 7% y-o-y excl. FX, while adj. EBIT came in at SEK 3.9m (vs. ABGSC SEK 5.7m) for a margin of 3.8%. Although this was a tad below our forecasts, we think that the overall Q2 numbers were good, particularly given the strong ACV number.
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