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Litium

Litium

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Cloud-based platform for digital commerce

Litium is primarily a software provider, which has claimed a top-three spot in the Nordic market for digital commerce platforms. The company offers its Litium On Demand solution through a cloud-based model. The market for digital commerce is growing strongly, driven by the digitalisation of business models, and a shift from physical to digital storefronts that is forcing B2B and B2C corporations to adapt to the new landscape.

We see Litium as well-positioned to further solidify its position as a top-three provider of digital commerce platforms in the middle-market segment in the Nordics. Litium’s digital commerce platform, Litium On Demand, has been developed over several years and offers an attractive value proposition. Litium operates in the fast-growing global digital commerce market, which is forecast to grow with a CAGR of 9.3% 2017-2023, driven by the digitalisation of society and retailer business models. Litium wants to establish itself in one non-Nordic market by 2021, which we believe will fuel further growth.

Long-term risks include financial risk, key partner dependency and strong competition. Litium is not generating positive cash flows so additional capital will likely need to be raised. There is a risk that Litium will not be able to hit its target of profitability in 2021. Litium is dependent on its implementation partners, which are responsible for driving sales of Litium on Demand and are a key part of its business model. The software business is competitive, which might require Litium to increase R&D investments to keep the digital commerce platform viable.

Financials

SEKm 2020 2021e 2022e
Sales 48 62 80
Sales growth (%) 18,1 28 30
EBITDA -9 0 14
EBITDA margin (%) -18 -0,4 17,7
EBIT adj -18 -11 3
EBIT adj margin (%) -37,1 -17,8 4,3
Pretax profit -18 -11 3
EPS rep -1,29 -0,71 0,17
EPS growth (%) 23 44,5 124,3
EPS adj -1,29 -0,71 0,17
DPS 0 0 0
EV/EBITDA (x) -51,9 -981,6 19,6
EV/EBIT adj (x) -25,1 -24,3 81
P/E (x) -25,2 -25,9 106,4
P/E adj (x) -25,2 -25,9 106,4
EV/sales (x) 9,3 4,3 3,5
FCF yield (%) -6,4 -7,4 -4,9
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 1,5 69,8 -0,5
Lease adj. FCF yield (%) -6,4 -7,4 -4,9
Lease adj. ND/EBITDA 1,5 69,8 -0,5
SEKm 2020 2021e 2022e
Sales 48 62 80
COGS -13 -19 -22
Gross profit 35 43 58
Other operating items -44 -43 -44
EBITDA -9 0 14
Depreciation on tangibles 0 0 0
Depreciation on intangibles -9 -11 -11
EBITA -18 -11 3
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -18 -11 3
Other financial items 0 0 0
Net financial items -1 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -18 -11 3
Tax 0 0 -1
Net profit -18 -11 3
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -18 -11 3
EPS -1,29 -0,71 0,17
EPS Adj -1,29 -0,71 0,17
Total extraordinary items after tax 0 0 0
Tax rate (%) 0 0 -22
Gross margin (%) 72,3 69,8 72,2
EBITDA margin (%) -18 -0,4 17,7
EBITA margin (%) -37,1 -17,8 4,3
EBIT margin (%) -37,1 -17,8 4,3
Pretax margin (%) -38,2 -17,9 4,3
Net margin (%) -38,2 -17,9 3,4
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 18,1 28 30
EBITDA growth (%) 2,7 96,9 5326,7
EBIT growth (%) -9,4 38,5 131,3
Net profit growth (%) -11,9 39,9 124,3
EPS growth (%) 23 44,5 124,3
Profitability 2020 2021 2022
ROE (%) -42,1 -17 3,4
ROE Adj (%) -42,1 -17 3,4
ROCE (%) -39,4 -16,7 4,4
ROCE Adj(%) -39,4 -16,7 4,4
ROIC (%) -47,9 -22,4 4,1
ROIC Adj (%) -47,9 -22,4 4,1
Adj earnings numbers 2020 2021 2022
EBITDA Adj -9 0 14
EBITDA Adj margin (%) -18 -0,4 17,7
EBITA Adj -18 -11 3
EBITA Adj margin (%) -37,1 -17,8 4,3
EBIT Adj -18 -11 3
EBIT Adj margin (%) -37,1 -17,8 4,3
Pretax profit Adj -18 -11 3
Net profit Adj -18 -11 3
Net profit to shareholders Adj -18 -11 3
Net Adj margin (%) -38,2 -17,9 3,4
Depreciation and amortisation -9 -11 -11
Of which leasing depreciation 0 0 0
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj -9 0 14
EBITDA lease Adj margin (%) -18 -0,4 17,7
Leasing payments 0 0 0
SEKm 2020 2021e 2022e
EBITDA -9 0 14
Net financial items -1 0 0
Paid tax 0 0 -1
Non-cash items 0 0 0
Cash flow before change in WC -9 0 13
Change in WC -1 1 1
Operating cash flow -10 1 15
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -19 -22 -28
Acquisitions and disposals 0 0 0
Free cash flow -30 -21 -14
Dividend paid 0 0 0
Share issues and buybacks 40 25 0
Other non cash items 1 3 2
Decrease in net IB debt 13 16 -8
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 47 58 72
Tangible fixed assets 1 2 2
Other fixed assets 0 0 0
Fixed assets 49 60 78
Inventories 0 0 0
Receivables 11 12 13
Other current assets 1 6 6
Cash and liquid assets 15 19 7
Total assets 76 97 104
Shareholders equity 54 76 81
Minority 0 0 0
Total equity 54 76 81
Long-term debt 1 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 1 0 0
Accounts payable 7 7 8
Other current liabilities 13 13 14
Total liabilities and equity 76 97 103
Net IB debt -13 -19 -7
Net IB debt excl. pension debt -13 -19 -7
Capital invested 41 57 74
Working capital -7 -3 -3
EV breakdown 2020 2021 2022
Market cap. diluted (m) 463 287 287
Net IB debt Adj -13 -19 -7
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 451 268 280
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 76,2 71,6 80,2
Capital invested turnover (%) 129,2 125,7 127,3
Capital employed turnover (%) 106,3 87,2 91,8
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 18,1 16,3 14
Payables / sales (%) 13,5 11,7 9,6
Working capital / sales (%) -12,7 -8 -3,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -23,8 -25 -8,6
Net debt / market cap (%) -6 -7,2 -2,6
Equity ratio (%) 71,4 78,5 77,8
Net IB debt adj. / equity (%) -23,8 -25 -8,6
Current ratio (%) 133,7 179,3 115,3
EBITDA / net interest (%) -1734,7 -634,3 0
Net IB debt / EBITDA (%) 148,4 6979,5 -48,4
Interest cover (%) -3548,6 -47513,6 0
Lease liability amortisation 0 0 0
Other intangible assets 47 58 76
Right-of-use asset 0 0 0
Total other fixed assets 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing -13 -19 -7
Net IB debt / EBITDA lease Adj (%) 148,4 6979,5 -48,4
SEKm 2020 2021e 2022e
Shares outstanding adj. 13 14 14
Fully diluted shares Adj 14 16 16
EPS -1,29 -0,71 0,17
Dividend per share Adj 0 0 0
EPS Adj -1,29 -0,71 0,17
BVPS 4,11 5,29 5,6
BVPS Adj 0,51 1,23 0,34
Net IB debt / share -1 -1,3 -0,5
Share price 16,25 18,5 18,5
Market cap. (m) 214 266 266
Valuation 2020 2021 2022
P/E -25,2 -25,9 106,4
EV/sales 9,33 4,33 3,48
EV/EBITDA -51,9 -981,6 19,6
EV/EBITA -25,1 -24,3 81
EV/EBIT -25,1 -24,3 81
Dividend yield (%) 0 0 0
FCF yield (%) -6,4 -7,4 -4,9
P/BVPS 7,88 3,5 3,3
P/BVPS Adj 63,1 15,01 54
P/E Adj -25,2 -25,9 106,4
EV/EBITDA Adj -51,9 -981,6 19,6
EV/EBITA Adj -25,1 -24,3 81
EV/EBIT Adj -25,1 -24,3 81
EV/cap. employed 8 3,5 3,5
Investment ratios 2020 2021 2022
Capex / sales 40,2 35,5 35,5
Capex / depreciation 209,8 204 264,1
Capex tangibles / tangible fixed assets 30,1 20,2 20,8
Capex intangibles / definite intangibles 40,1 37,1 37,2
Depreciation on intangibles / definite intangibles 19,5 18,5 14,3
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) -6,4 -7,4 -4,9

Equity research

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Media

Litium - Company presentation with CEO Patrik Settlin
Litium - Interview with CEO Patrik Settlin following Q2 result (In Swedish)

Main shareholders - Litium

Main shareholders Share capital % Voting shares % Verified
FastPartner AB 17.8 % 17.8 % 30 Jun 2021
Swedbank Robur Fonder 8.6 % 8.6 % 31 Jul 2021
TIN Fonder 8.2 % 8.2 % 31 Jul 2021
Swedbank Försäkring 7.7 % 7.7 % 30 Jun 2021
Avanza Pension 6.4 % 6.4 % 30 Jun 2021
Tagehus Holding AB 5.0 % 5.0 % 30 Jun 2021
Mikael Lindblom 5.0 % 5.0 % 31 Dec 2020
Aktia Asset Management 4.5 % 4.5 % 30 Jun 2021
Lars Karlsson 3.5 % 3.5 % 30 Jun 2021
Nordnet Pensionsförsäkring 2.8 % 2.8 % 30 Jun 2021
Source: Holdings by Modular Finance AB

Insider list - Litium

Name Quantity Code Date
Patrik Settlin + 10 000 BUY 27 May 2021
Christopher Johansson +1 200 000 Received loan 15 Mar 2021
Sven Marcus Christopher Johansson +1 200 000 Received loan 15 Mar 2021
Fastpartner AB +1 200 000 Received loan 15 Mar 2021
Christopher Johansson -1 200 000 Received loan 19 Feb 2021
Fastpartner AB Fastpartner AB -1 200 000 Received loan 19 Feb 2021
Mikael Lindblom + 45 520 BUY 19 Nov 2020
Marie Holmqvist + 350 BUY 27 Aug 2020
Mikael Lindblom + 30 000 BUY 21 Nov 2019
Johan Rutgersson + 10 000 BUY 13 Nov 2019

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