In Q1 2023, Northbaze experienced a reduction in sales, deviating from the otherwise positive trajectory of sales growth. The y/y decline of 10% can in large part be attributed to the challenging market conditions. Notably, within the group, the Mobility and Audio & Sound segments were responsible for this decline, demonstrating respective y/y contractions of -37% and -35%. However, it is important to note that the sales figures from Copter in Q1 2022 included revenues from the now-divested company, Shield Patrol, which may distort the comparison for the Mobility segment. On a positive note, Adiantes showcased a y/y increase in sales by 25%, indicating that this segment is expected to serve as the primary revenue driver for the company throughout 2023.

Northbaze's current market capitalization stands at SEK71m, implying an enterprise value (EV) of SEK86m. In 2023, we project sales and EBITDA to reach SEK169m and SEK17m respectively, resulting in an EV/Sales multiple of 0.5x and an EV/EBITDA multiple of 5x. This suggests that Northbaze’s shares are trading at a discount when compared to the peer group, which trades at a median EV/Sales of 0.6x and a median EV/EBITDA of 6.8x for 2023.

We derive our fair value range from a fundamental DCF framework for three scenarios: base case (most likely), bear case (pessimistic), and bull case (optimistic). In all scenarios, we utilize a weighted average cost of capital (WACC) of 13%. With our updated view of the company and prevailing market conditions, we have revised our base case. As a result, our fair value range remains unchanged at SEK0.6–1.9, with our revised base case standing at SEK1.0 (1.1).