• Q1: EBIT NOK 4.0m in line with ABGSCe 4.0m
• 2025 ambition reconfirmed
• Expect smaller estimate changes

Q1: EBIT in line with expectations

StrongPoint reported Q1 revenues of NOK 381m, in line with ABGSCe NOK 382m. The gross margin was 36.5%, a decrease vs 38.6% in Q1 last year, but slightly better than ABGSCe 36.0% (+0.5pp). EBITDA was NOK 13.5m (3.5% margin), 9% below ABGSCe NOK 15m (3.9% margin). However, EBIT was in line: NOK 4.0m vs ABGSCe NOK 4.0m. Thus, over-all results were in line. Reported EPS was NOK 0.12 vs ABGSCe NOK 0.05, boosted by positive net finance driven by FX.

ALS continues to outperform

StrongPoint's Q1 growth is mainly driven by ALS, with ~1% organic growth, while total growth was 27%. The ALS acquisition continues to over-perform our expectations, with NOK 78m revenues in Q4 vs our NOK 65m expectation. The -2.0pp GM decline y-o-y is driven by: ALS acquisition diluting margin, price pressure, FX, but also the AutoStore delivery to ColliCare which dilutes GM as the project was StrongPoint's first deployment of an AutoStore system.

E-com investment levels still impacting EBITDA

StrongPoint says the EBITDA level is still negatively affected by investments in e-commerce solution, but it has also reduced it to reflect current market demand. If it only focused on its in-store solutions, StrongPoint says it would have achieved EBITDA margins of ~10-11% (vs 3.5% reported).

Prudent customers, but resilient over-all market

StrongPoint says it is experiencing solid demand, although retailers are more prudent with investments resulting in longer decision-making processes. The grocery retail market is stable despite global market uncertainty, and discounters are growing as consumers demand more value-for-money.

Smaller estimate changes expected

We expect small estimate changes following the Q1 report, as most P&L lines were in line with our expectations. However, we argue the Q1 report de-risks the current 2023 estimates, and expect a neutral to positive share price