Netcompany: Sales and costs reshaping the personnel pyramid - Nordea

Both we and company-compiled consensus expect Netcompany to have continued solid revenue growth (12-13% y/y) for Q1, although we expect EBITDA to decline y/y, likely driven by salary inflation and costs linked to reducing the number of full-time employees (FTE) (by ~50-75) – not to prepare for lower activity, but rather to reshape the personnel pyramid to better fit the business model. These costs will likely impact both Q1 and Q2. While embedded in 2023 guidance (~1.5 pp margin dilution), the quarterly timing is as of yet undisclosed. We continue to believe Netcompany will exceed its FY EBITDA margin guidance, as we foresee 18.9%, versus guidance for 15-18% (consensus: 17.7%), but we expect a possible guidance upgrade to be more likely for H2. Our updated combined DCF and peer group valuation points to a trimmed fair value range of DKK 400-465 (410-520) per share, owing to slightly lower peer multiples. Marketing material commissioned by Netcompany.