Company overview

Zwipe Q4: According to plan

Redeye Research Note timeStamp 2020/02/26

Zwipe reported negligible sales in Q4 as expected. We believe the company to be on track and expect pilots by the end of the year.

The financial results during Q4 was in line with our expectations, reporting only negligible revenues of NOK 0.2m.
 
Sales for the full year amounted to NOK 1.5 m (2.3m), while EBITDA came in at NOK -92m (-60.3m). EBITDA was partly affected by a payment of NOK 19m to Idemia during 2019, while around NOK 20m remains to be paid to the partner during 2020. As we had expected a payment of NOK 10m to Idemia in 2019, our estimated EBITDA loss was NOK -81m, versus the outcome of NOK -92m.
 
We expect the loss to be around NOK 25m smaller in 2020 than in 2019, resulting in an EBITDA of around NOK -68m. 2019 had several one-time costs, such as costs for the IPO and the rights issue. Furthermore, the reduced costs stemming from the restructuring program following the Idemia collaboration should mean net NOK 20m in reduced costs in 2020.
 
We will not make any valuation changes following the report, and we believe the substantial negative market reaction today to be excessive. 
 
All in all, we see no big surprises in the report, and things seem to continue according to plan.

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