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Solteq - Clear earnings beat

Solteq’s revenue in Q3 grew 8.5% in comparable terms to EUR 13.3m (Evli EUR 13.0m). The comparable operating profit clearly beat our expectations at EUR 1.4m (Evli EUR 0.7m). Guidance reiterated: Solteq Group’s comparable operating profit in 2020 is expected to grow significantly.
  • Net sales in Q3 were EUR 13.3m (EUR 13.0m in Q3/19), slightly above our estimates (Evli EUR 13.0m). Growth in Q3 amounted to 2.3% y/y. Comparable growth, adjusted for the divestment of the SAP ERP business, amounted to 8.5%. Comparable growth was attributable to both segments. Approximately a fifth of sales came from outside Finland.
  • The operating profit and comparable operating profit in Q3 amounted to EUR 1.4m (EUR 0.3m/0.0m in Q3/19), clearly above our estimates (Evli EUR 0.7m). Capitalized product development investments during 1-9/2020 amounted to EUR 2.3m. Solteq expects product development investments in 2020 to amount to less than EUR 3.0m (2019: EUR 3.9m).
  • Solteq Digital: Comparable revenue in Q3 amounted to EUR 9.2m (Q3/19: EUR 9.3m) vs. Evli 9.2m. The comp. EBIT was EUR 0.8m (Q3/19: EUR 0.2m) vs. Evli EUR 0.5m.
  • Solteq Software: Revenue in Q3 amounted to EUR 4.1m (Q3/19: EUR 3.7m) vs. Evli EUR 3.8m. The comp. EBIT was EUR 0.5m (Q3/19: EUR 0.1m) vs. Evli EUR 0.2m.
  • Guidance reiterated: the comparable operating profit in 2020 is expected to grow significantly.
  • The pandemic has slightly affected sales in several business areas and the Nordic subsidiaries but the good order backlog, the capability to deliver, and success in the Utilies sector drove growth and has so far not affected the group’s performance as a whole.
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