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Strongpoint: Soft numbers on lower sales - ABG

Weak report, sales down 9% y-o-y
Numbers hit by component shortage and slower roll-out
’21 EBIT down +40%, 5-10% negative revisions for ‘22

StrongPoint reported Q3 revenues of NOK 196m, 21% below our estimate of NOK 248m and down 9% y-o-y. The miss vs. our estimate was due to postponement of some installations due to supply issues with components and slower large scale roll-outs in new markets. Adj. EBITDA was NOK 8m, ~70% below our estimate of NOK 27m and down from last years’ NOK 21m. This corresponds to an adj. EBITDA margin of 4%. The miss vs our EBITDA estimate is explained by the revenue miss described above and that StrongPoint invests in their e-com business. Net profit was boosted by the NOK 165m sales gain from the divestment of their Label business, i.e. StrongPoint has now plenty of firepower for M&A.

The miss and our expectations that Q4 will face some of the same issues, EBIT for ’21 is likely down +40%. However, we do expect to do materially less revisions for ’22, i.e. 5-10%, as we expect a more normalized market and improved component availability.
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