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Third party research

Litium: Dependable as usual - ABG

Litium

This is a third party research report and does not necessarily reflect our views or values

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- Sales and EBITDA in line with ABGSCe
- Simplicity and predictability likely to drive limited cons. revisions
- Cost base discipline continues to drive margins

Q2'24 report
Litium reported an ARR of SEK 71.3m (0% vs. ABGSCe 71.1m), net sales of SEK 18.5m (0% vs. ABGSCe 18.6m) and EBITDA of SEK 4.3m (+17% vs. ABGSCe 3.7m). Overall, the report was broadly in line with our estimates, without notable surprises.

Thoughts and outlook
Litium continues to benefit from its relatively fixed revenue base and appears to not display meaningful net churn (i.e., customer additions and upselling less churn). As the company continues to perform at least in line with expectations, we are increasingly comfortable in the company being able to deliver break-even (or even positive) cash flow while growing its ARR. In summary, our view of the company's operating characteristics remain unchanged but positive.

Cons. estimate revisions and valuation
Based on the first impressions from the report, we anticipate consensus to make positive, low single-digit ’24e-‘26e estimate revisions with respect to EBITDA. The company is trading at an EV/ARR of 2.5x based on reported figures. Litium will host a webcast today at 11:00 CET to present the Q2 report and to conduct a Q&A session.
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