Formpipe: Weaker ACV, but higher dividends - ABG
This is a third party research report and does not necessarily reflect our views or values
* +7% organic growth y-o-y, -1% vs. ABGSCe
* 13% adj. EBIT margin (vs. ABGSCe 6%)
* Cons to lower sales assumptions, but raise margins
Q4 results
Sales SEK 60m (-1% vs ABGSC 61m), adj. EBIT 8m (+112% vs ABGSC 4m). Cash flow weak, mainly due to significant NRIs that amounted to SEK 43m, of which SEK 25m relating to the recent divestment transaction and SEK 18m to personnel changes (mainly in UK). Encouragingly, the BoD is proposing a dividend of SEK 760m, corresponding to SEK 14/share following the recent divestment. This was above our expected SEK 600m.
Q4 thoughts
This was the second quarter with Formpipe's Public segment deconsolidated from the P&L, given the recent sale. The remaining business, Lasernet, saw organic sales increase by 7% y-o-y, which was slightly below our forecast of +9%. Meanwhile, costs were lower, resulting in an adj. EBIT margin of 13%, which was above our forecasted margin of 6%. This is the second consecutive quarter of better-than-expected profitability, and we expect Formpipe's increased focus on costs, including today's layoffs, to continue driving margin improvements. However, SaaS ACV was weak at only SEK 4m (ABGSCe SEK 11m), down from SEK 11m in Q4'24. This was a soft number given the solid momentum in Q3; however, given the recent management changes and the process of public divestment, the outcome is not entirely unexpected. Nevertheless, the weaker ACV figure will impact growth rates over the next few quarters.
Estimate changes and valuation
Formpipe's share is -11% YTD and is trading at 1.9x EV/sales on our unrevised 2026 estimates. It is a messy report, but our preliminary view is that consensus will lower both sales and cost assumptions for 2026, ultimately resulting in slightly negative adjustments to '26e EBIT.
* 13% adj. EBIT margin (vs. ABGSCe 6%)
* Cons to lower sales assumptions, but raise margins
Q4 results
Sales SEK 60m (-1% vs ABGSC 61m), adj. EBIT 8m (+112% vs ABGSC 4m). Cash flow weak, mainly due to significant NRIs that amounted to SEK 43m, of which SEK 25m relating to the recent divestment transaction and SEK 18m to personnel changes (mainly in UK). Encouragingly, the BoD is proposing a dividend of SEK 760m, corresponding to SEK 14/share following the recent divestment. This was above our expected SEK 600m.
Q4 thoughts
This was the second quarter with Formpipe's Public segment deconsolidated from the P&L, given the recent sale. The remaining business, Lasernet, saw organic sales increase by 7% y-o-y, which was slightly below our forecast of +9%. Meanwhile, costs were lower, resulting in an adj. EBIT margin of 13%, which was above our forecasted margin of 6%. This is the second consecutive quarter of better-than-expected profitability, and we expect Formpipe's increased focus on costs, including today's layoffs, to continue driving margin improvements. However, SaaS ACV was weak at only SEK 4m (ABGSCe SEK 11m), down from SEK 11m in Q4'24. This was a soft number given the solid momentum in Q3; however, given the recent management changes and the process of public divestment, the outcome is not entirely unexpected. Nevertheless, the weaker ACV figure will impact growth rates over the next few quarters.
Estimate changes and valuation
Formpipe's share is -11% YTD and is trading at 1.9x EV/sales on our unrevised 2026 estimates. It is a messy report, but our preliminary view is that consensus will lower both sales and cost assumptions for 2026, ultimately resulting in slightly negative adjustments to '26e EBIT.