Movinn Q2-23

Strong Revenues Despite a Tough Climate

During H1-23, Movinn A/S (“Movinn” or the “Company”) delivered revenues relatively in line with our expectations but with higher costs than estimated, as a result of lower demand leading to higher vacancy rates. The macroeconomic headwinds that have contributed to this outcome are anticipated to persist to some extent throughout 2023, gradually subsiding thereafter in 2024, which is estimated to result in an improved profitability thereafter. With an estimated EBITDA of DKK 10.4m in 2024, an applied target multiple of EV/EBITDA 15x, and a discount rate of 11.4%, a net present potential value per share of DKK 7.5 (10.2) is derived in a Base scenario.

• Challenging Market Conditions Affects the Performance

Movinn’s net revenue amounted to DKK 20.7m (17.8) in Q2-23, corresponding to a growth of 16% Y-Y, slightly below our estimate of DKK 22.5m. The Company is still experiencing a lower demand than expected due to the current macro-economic climate as well as several large clients ending projects in Odense, leading to project-related staff not being on assignment in the city. Going forward, we expect a continued challenging market in 2023, leading to higher vacancy rates, hence affecting profitability negatively. However, we expect demand to gradually improve from early 2024, which, in combination with Movinn’s new strategy of taking on larger projects, is expected to improve profitability.

• Continued Strong Revenue per Unit

The revenue per unit amounted to DKK 186k in H1-23, divided into DKK 198k on the Danish units and DKK 88k on the Swedish units, compared to DKK 178t in H1-22. The higher revenue per unit is a strong performance according to Analyst Group considering that vacancy rates were much higher in H1-23, 16.7% compared to 9.5% in H1-22. Hence, we expect, as vacancy rates are estimated to decrease from 2024, that Movinn can deliver a revenue per unit in the higher end of the Company’s guidance of DKK 180-225t.

• Updated valuation range

With the H1-23 report presented, it is evident that Movinn has performed below our expectations regarding profitability, which can be attributed to a lower-than-anticipated demand. Given the Company’s performance in the first half of the year, as well as the prospects concerning demand in the forthcoming quarters, we have revised our financial forecasts in this analysis update. However, we see the lower profitability in 2023 as an unusual event, as margins has been, and is expected to be, stronger than during 2023. Consequently, in this update, our potential value per share is derived with an EV/EBITDA multiple applied on 2024’s EBITDA compared to 2023’s EBITDA in previous updates, as this is considered to give a better view of Movinn’s fair value according to Analyst Group. As a result of this, in combination with the updated financial forecasts, we have adjusted our valuation range for all three scenarios: Base, Bull, and Bear.