ARR for cloud grew from SEK9.6m to SEK16.1m (68% y/y). However, sales were still below expectations of SEK43.5m vs the estimate of SEK51.2m. The primary reason was due to lower project-based sales. However, recurring revenue also decreased from SEK55m to SEK48m (-13% y/y). We estimate project sales were down 87% in Q4 but only 10% in H2 2023 vs H2 2022. We expect Q4 to be a sequential bottom for project-based sales with a recovery in H2 2024. Cost control was solid in the quarter and aligned with our estimates, but the lower sales resulted in an EBITDA of SEK-1.1m vs our estimate of SEK6.0m.  

Binero completed the all-share acquisition of Infrateq on 2 February 2024. The implied consideration is cSEK195m at an EV/S of 0.6x and EV/EBITDA of 10.6x on 2022 figures. Infrateq offers project management of technical network solutions, including media distribution via a digital platform in the Nordic region. Infrateq had an adjusted turnover of SEK321.0m with an EBITDA of approximately SEK18.3m for the full year 2022 and had about 45 employees. While Binero’s cash was only SEK4.5m at the end of the year, Binero acquired SEK25m in net cash in the Infrateq acquisition. While we are optimistic about Infrateq and believe the equity issuance risk is reduced, we think it will introduce near-term uncertainties that may weigh on the share.

While we lower our estimates for the ‘legacy’ Binero business, consolidation of Infrateq since 2 February 2024 raises our consolidated net sales between 290%-320% and EBITDA between 175%-195%. We believe Binero is cash-producing after the consolidation of Infrateq. Hence, we believe there is no need for equity issuance. We narrowed our fair value range and reduced our base case from 1.6-6.5 with a base case of SEK4.2 to SEK2.6-5.7 with a base case of SEK3.4.