Both sales and EBIT beat our forecasts, following a strong Q1 with high utilization rates and one more working day compared to Q1 last year. However, even on a per-employee and working day basis, sales-cogs and contribution per employee increased y/y. CombinedX increased its prices by 1 January 2023, while the increased personnel costs will occur first in Q2. Despite some short-term positive effects, we believe this is a solid quarter regarding growth and margins.

While Q1 2023 is a strong quarter on every line, management’s outlook for Q2 is softer following fewer working days, a gap between large projects in Elvenite, and the restructuring of Nethouse and Attentec. Despite the soft guidance for Q2, we increase our 2023 forecasts somewhat, as the positive effect of the strong Q1 outcome offsets the soft Q2. Also, management’s view of the market and CombinedX’s ability to execute in it remains solid.

We leave our Base Case at SEK60 (60), constituting a significant upside relative to the current share price. Despite the strong Q4 2022 and Q1 2023, the discount to peers remains solid – 30-40% on EBITDA 2023-2025. While CombinedX had a rough start as a listed company, we believe it is time for a revaluation.