Northbaze reached net sales of SEK37.3m, a y/y growth of 17%. It was better than our estimates of SEK36m. Gross margin came in at SEK17.6m with a gross margin of 47%, vs our est of SEK16m, 43%. Ebitda was SEK5.3m, vs our estimate of SEK1m, much better than our estimate. Cashflow from operations amounted to SEK12m, resulting in a cash position of SEK12m at the end of the period.

H2 2024 is expected to be the strongest period for Northbaze, with full focus now on making Lowwi profitable. We slightly trim our FY 2024 sales forecast to SEK173m (-3%) due to the soft performance from Lowwi this quarter, but we increase the EBITDA margin estimate by 2 pp to 7% (5%). We believe Northbaze will achieve a 10% EBITDA margin as early as 2025e.

Redeye reiterate the valuation range SEK0.12 - SEK 1.43 with a Base case at SEK0.65. Northbaze’s market capitalisation is SEK48m, resulting in an Enterprise Value (EV) of SEK71m. This corresponds to an EV/Sales multiple of 0.3x and EV/EBITDA 2.9x for 2025e. Our valuation implies an upside potential of 128% to our Base Case. But as a reminder, the stock's liquidity is extremely low.