Formpipe Software

Research update


Formpipe: Confirmed potential

Q4 revenue of 106.7 mSEK was in line with our expected 106.5 mSEK; EBIT was on the other hand significantly better than our estimate. EBIT margin came in at 14.8%, versus our estimate 8.6%. Profitability was driven by higher license revenues, with first license revenue related to Stockholm city, lower sales and other costs. The strong quarter confirms the potential of future margin improvement.

A strong financial performance and position allows to increase the proposed dividend to 0.3 SEK per share.

Lack of news from Life Science segment in the report signals that it may need more time than expected. We do not expect the Life Science segment to contribute positively to EBITDA before 2018.

Our fair value range remains overall intact with a somewhat higher bear case.

Update - We have corrected our model and the research report due to an error. This will have a minor impact on the fair value range and our base case. Our base case is now 10.5 SEK.

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