<a id="bm-comp-d6b52855-7308-4497-a762-a2b6b91a5965" name="bm-comp-d6b52855-7308-4497-a762-a2b6b91a5965" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d6b52855-7308-4497-a762-a2b6b91a5965" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 slightly slower than expected, partly due to discontinued product</li><li>We cut '24e-'26e adj. EBIT by 3-1% due to lower sales</li><li>Poised for margin expansion, 16x '25e EV/EBIT</li></ul></td></tr></table><a id="bm-comp-cf0a3241-b333-4805-af2f-f56ce5267554" name="bm-comp-cf0a3241-b333-4805-af2f-f56ce5267554" class="BMCustomAnchor"></a><table><tr><td bm-component-id="cf0a3241-b333-4805-af2f-f56ce5267554" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Note the SEK 1m ACV churn from non-core product</h3><p>The trend of solid growth in Private (+15% y-o-y) alongside subdued sales activity in Public (-1% y-o-y) continued in Q3. The latter continued to face headwinds from lower deliveries to the important Landbrugsstyrelsen, although we expect this to gradually improve as the new agreement ramps up. In addition, Formpipe is taking measures to further strengthen profitability, including restructuring some personnel and realising synergies between its three different case document management products following the merger of the Swedish and Danish organisations in early 2024. We think it will take time for the full product synergies to be realised, but we are positive on the action. Meanwhile, Private (43% of sales) delivered a solid ACV of SEK 6m, albeit below our forecast of SEK 8.5m, which was partly due to Formpipe's decision to discontinue its non-core life sciences product, reducing ACV by SEK 1.2m. Overall, both sales and adjusted EBIT were 3% below our forecast.</p><h3 class="bm-h3">Estimate changes</h3><p>We lower '24e/'25e/'26e adj. EBIT by 3/1/3% on the back of 2% lower sales estimates. We continue to look for improved organic growth in 2025e, driven by: 1) normalising delivery sales in Public DK, 2) better traction for Private/Lasernet amid recent product changes and a better macro environment, and 3) much easier comps. With its scalable business model, we expect EBIT margins to expand, reaching 18% in '26e (vs. 9% in '24e).</p><h3 class="bm-h3">30x-11x '24e-'26e EV/EBIT</h3><p>We continue to find Formpipe's business transformation in recent years appealing. In addition to an improved growth outlook, the higher share of recurring revenues means improved visibility on estimates. The stock is trading at 30x and 16x '24e and '25e EV/EBIT on our updated estimates.</p></td></tr></table>