COVID-19 lockdown measures continue to pressure in Q2’21
Moment reported Q2’21 total income of SEK 45m (SEK 20m in government aid), which was 23.5% above our estimate of SEK 37m, for a total y-o-y growth of -2.1%. The majority of operations were closed down in Q2, however COVID-19 easing measures did allow Moment to initiate limited sales of tickets for summer events in Falkenberg, which contributed in Q2. Opex was mainly flat compared to Q1’21, at ~SEK 55m, which was due to Moment’s much reduced cost base. As such, reported EBIT was SEK -25m compared to our estimate of SEK -15m.
Lower growth expectations for Q3’21e drive estimates
Following the Q2 report, which was below our estimates, we opt to lower our sales assumptions by ~7% for ‘21e-‘23e, mainly driven by us adjusting our growth assumptions for Q3’21e. The majority of Moment’s operations were closed down in Q2, and the ones which have been able to operate have had limited operations. The Swedish government has established a gradual easing of lockdown measures, which started on 1 July, but given the current measures we think that Moment will be negatively pressured in Q3’21e as well. We also adjust the number of outstanding shares as a result of recent financing initiatives, which drives our EPS estimate revisions.
EV/EBIT of 17-10x ‘22e-’23e, new cost base could lift margins
Based on our updated estimates and at the current share price, Moment is trading at an EV/sales of 1.2-0.4x for ’21e-’23e, and an EV/EBIT of 17.3-10.4x for ’22e-’23e. In terms of ’22e, we don’t factor in any significant revenue improvement until Q4’21e, which will depend on whether the Swedish government’s current plan of gradually easing lockdown measures can be maintained. However, given Moment’s new and flexible cost base, we could see significant margin improvement in the years to come compared to historical levels.