Kepler Cheuvreux has revised its rating for Crayon Group (CRAYF, Financial), moving the stock from a "Buy" to a "Hold." This adjustment comes with a price target set at NOK 142. The change reflects the firm's updated assessment of Crayon Group's market performance and future prospects.
CRAYF Key Business Developments
Release Date: May 21, 2025
- Gross Profit Growth: 5% in Q1.
- Adjusted EBITDA Margin: 12.1%, down 1.8 percentage points from the previous year.
- Net Working Capital: NOK1.4 billion, an improvement of NOK401 million compared to Q1 2024.
- International Growth: Europe 19%, APAC and EMEA 12%, US 15%.
- Nordics Growth: 7%, with direct business growth at 3% and consulting business at 5%.
- Gross Sales: NOK17.3 billion in Q1, reflecting a growth of 25%.
- Reported EBITDA: NOK170 million, a decrease of NOK8 million compared to the previous year.
- Interest Expenses: NOK63 million, reduced from NOK71 million in Q1 2024.
- Net Profit: NOK43 million, an improvement of NOK33 million compared to Q1 2024.
- Operating Cash Flow: NOK87 million for Q1.
- Cash Position and Liquidity Reserve: NOK3.3 billion.
- Leverage Ratio: 0.4, compared to 1.2 in Q1 last year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Crayon Group Holding ASA (CRAYF, Financial) achieved a 5% gross profit growth in Q1, with strong international growth, particularly in Europe with a 19% increase.
- The company saw exceptional 71% growth in its consulting business, highlighting its expanding service capabilities.
- Net working capital improved significantly, ending at NOK1.4 billion, marking the best performance ever and an improvement of NOK401 million compared to Q1 2024.
- The US market showed robust growth of 15%, driven by strong performance in both direct and channel businesses.
- Crayon is well-positioned in the evolving Microsoft partner ecosystem, with the scale and technical capabilities to capitalize on opportunities in areas like AI adoption and software asset management.
Negative Points
- The company underperformed in the Nordics, with only 7% growth, impacting overall results and necessitating management changes.
- Adjusted EBITDA margin decreased by 1.8 percentage points to 12.1%, reflecting ongoing investments and increased headcount.
- The transition from Microsoft enterprise agreements to CSP put negative pressure on Q1 gross margin, although it improved later in the quarter.
- The year-over-year comparison was affected by an exceptionally high incentive payout in Q1 2024, creating a challenging baseline for current performance.
- The direct business in the Nordics showed disappointing growth of only 3%, with the consulting business also underperforming at 5% growth.
