• Preliminary Q4 sales in line with ABGSCe, EBIT slightly above
• CEO Christian Sundin leaves after 16 years at helm
• Expect modest revisions for consensus

Q4 sales 0% vs. ABGSCe, EBIT SEK 6m (vs. ABGSCe SEK 5m)

This morning, Formpipe sent out two press releases, relating to the change of CEO and preliminary Q4 numbers. On the latter, Q4 sales of SEK 128m was in-line with ABGSCe SEK 128m, with sales growing 5% y-o-y (also against tough comps). Preliminary Q4 EBIT of SEK 6m was slightly above ABGSCe SEK 5m, for a margin of 4% (vs. 13% in Q4'21). The margin-contraction y-o-y does not deviate from recent quarterly results, and stems from elevated opex levels amid high personnel turnover and growth investments. In terms of revenue streams, on premise license sales were slightly above, while SaaS and delivery sales came in slightly below. We also note that ACV looks strong for Public SE and Public DK, while ACV in Private was slightly more lukewarm (probably partly due to the recent sluggish development for Temenos). On the CEO change, it was announced that Christian Sundin leaves the position after 16 years at helm. Mr Sundin will stay as interim CEO until a replacement has been found.

CEO update

While Formpipe's margins have been poor in 2022, sales growth have performed well, so we do not believe that the decision to change CEO mainly reflects the recent operational development but rather that the board of directors has requested a new helm to pursue the company's (relatively new) strategy that was commenced in 2021. Both the shareholder base and the board includes several software specialists in our view, so we expect them to have an agenda for the upcoming CEO and the future of the company.

Opex growth to decelerate in 2023e

The full Q4 numbers will be published on February 15. Based on today's preliminary Q4 figures alone, we do not expect any material estimate revision for consensus. Furthermore, we emphasise that we continue to expect opex growth to decelerate in the coming q