StrongPoint: Signs of improvement - ABG

* Q3 EBITDA of NOK 14m* Signs of improvement* Limited underlying estimate changes - DCF NOK 15/shQ3 EBITDA of NOK 14mStrongPoint delivered a decent Q3, with revenue up +2% y-o-y (NOK 320m vs. NOK 313m in Q3'24) and EBITDA at NOK 14m vs. ABGSCe NOK 9m. This translated into an EBITDA margin of 4.3%, up from 3.9% in Q3'24. The top-line growth was solely driven by UK & Ireland, which was up 127% y-o-y (AutoStore implementation and ESL installations). The revenues in the Nordics declined 12%, driven by lower product sales of low-margin ESL hardware and hard comps as several large rollouts were completed last year. Note that the gross margin increased by 2.2pp y-o-y, driven by a higher share of services (ESL and AutoStore installations). StrongPoint reiterated its long-term ambitions (EBITDA margin >10% and "healthy" revenue growth), and while not there yet, the YTD margin of 3.1% is +3.4pp from the same period last year, i.e. slow and steady improvements.Signs of improvementThe past few years have been challenging for StrongPoint, but 2025 indicates a recovery, with YTD EBITDA at NOK 31m, vs. NOK -3m in the same period last year (reported figures). Further, recurring revenue continues to grow, +12% y-o-y in Q3’25, driven by a 27% increase in licence revenue. We understand that some of the improvements stem from StrongPoint delivering on its Order Picking solution, so we find it encouraging that a leading retailer, MC (Portugal's top grocery retailer), chose the StrongPoint solution to replace its existing solution, i.e. we see this as a proof-of-concept for the StrongPoint Order Picking solution.Limited underlying estimate changes – DCF NOK 15/shWe make limited changes to our underlying estimates, and with Sainsbury's and MC Order Picking rollouts expected by summer '26, we see potential for a stronger '26e. Our DCF points to NOK 15/sh (fair value range of NOK 8-18/sh).