H1 2023 net sales amounted to SEK58.7m (54.5m), corresponding to -11% y/y growth, and were 20% below our expectations. Despite actual OPEX (other external costs and personnel expenses) coming in 17% below our expectations and decreasing c21% y/y, EBITDA amounted to SEK0.6m (-6.0m) compared with our estimate of SEK3.0m – clearly lower than our expectations. This led to an EBIT of negative SEK6.3m (-14.1m) versus an estimated negative SEK5.5m. Accordingly, we judge that Binero’s H1 2023 report was on the soft side, both regarding sales and margins.

According to management, the lower sales seen in H1 2023 are mainly a result of two factors. First, Binero has made planned restructuring and streamlining efforts regarding its product portfolio directed to its core business, such as towards its public cloud, container technology and observability. Second, Binero has seen increased uncertainty among customers through longer sales cycles for new consulting assignments and cutbacks in ongoing projects with existing customers. Consequently, these factors affected both sales and margins in H1 2023, while Binero aims for operational improvements in H2.

We make forecast changes following Binero’s H1 2023 report as we decrease our sales forecasts by 14-16% for 2023e and 2024e, which despite lowered OPEX assumptions for the same period, leads to a decreased EBITDA forecast. All in all, our DCF gives rise to a new fair value range with a Base Case of SEK4.2 (4.9) and new Bear and Bull Cases of SEK1.6 (2.0) and SEK6.5 (7.6), respectively. As such, with a share performance of approximately -25% YTD, Binero is currently trading at an EV/S of 1.1x based on our 2023e.