• Sales ramp-up continues (187% y-o-y), +13% vs. ABGSCe
• Positive EBIT (SEK 324k vs. ABGSCe -2m), first time since early 2023
• Aira partnership continues, improving FCF, positive momentum ahead

Aira partnership drove 32% sequential growth

Energy Save reported sales of SEK 79m (13% vs. ABGSCe SEK 70m), 187% y-o-y and 32% q-o-q. The gross margin was 25% vs. 29% LY and EBIT came in at SEK 324k (vs. ABGSCe SEK -2m), for a margin of 0% (ABGSCe -3%). Residential sales continued to ramp up and grew 28% q-o-q while Commercial grew by 168% q-o-q, but was down 38% y-o-y. According to the CEO, the Aira partnership continued to show results according to plan and drove revenues at a time when the industry and the rest of the market has seen relatively low activity. FCF improved and was SEK -399k (SEK -13m in Q4'23/'24) as working capital release was positive at ~1m. The cash balance was at SEK 51m, vs. 52m in Q4'23/24.

Estimate changes and outlook

On outlook, the CEO expects quarterly sales growth to continue (we have sales of SEK 72/77/81m in upcoming quarters vs. the actual 79m in the current quarter), albeit at a slower rate both y-o-y and q-o-q compared to previous quarters. Even though end-market conditions remain challenging (high interest rates, unfavourable electricity and gas prices), the CEO expects seasonality and lower inventory levels to support the continued sales ramp-up. We believe the better-than-expected Q1 results and higher base going into future quarters could lift FY'24/25e sales by ~10% for consensus, while this higher sales contribution could potentially result in Energy Save reaching positive EBIT for FY'24/25e (vs. our estimate of -4m).

Valuation

Energy Save is currently trading at 0.7x EV/Sales '24/'25e and 11-5x EBIT '25/'26-'26/'27e. We find today's report encouraging as numbers are better than our expectations across the board, and would expect a continued positive trend in both sales and earnings.