Loihde - Growth and profitability improvement
Loihde’s Q1 was a pleasant surprise, as we had expected a softer start to the year. The adj. EBITDA improved clearly y/y and beat our estimate, at EUR 1.6m (Evli 0.5m). Net sales also grew nicely by 6% to EUR 33.0m (Evli EUR 31.8m).
- Group results: Loihde’s net sales were slightly below our expectations. Net sales grew by 6% y/y to EUR 33.0m (Evli: 31.8m). The growth was a pleasant surprise, with Security Solutions and Cyber, Cloud & Connect growing noticeably y/y. Adj. EBITDA beat our estimates and amounted to EUR 1.6m (Evli: 0.5m), reflecting a margin of 4.9% and improving clearly y/y (Q1/23: EUR -0.1m)
- According to Loihde the year started as planned, with EBITDA improving significantly y/y. The company saw good growth in continuous services, while the demand for digital development services remained weaker.
- Billing rates remained low in Digital Services and Data & AI. Both business areas saw clearly decreased revenue y/y, which weakened the company’s profitability and Loihde continued to implement efficiency measures.
- 2024 guidance (reiterated): Group revenue is expected to be on par with the previous year or grow. The Group’s adjusted EBITDA is estimated to improve compared to 2023, when it was EUR 7.6m.
- Our pre-Q1 2024E adj. EBITDA estimate was at EUR 9.6m. We see slight upwards pressure to our estimate. H1 is typically softer and the difference to our estimates increases the confidence in the company’s guidance, with less need for improvement in H2.