IC Market Espresso 18 Jul 2023

Ericsson NT Signs New Agreements Worth EUR 6.8m

Yesterday, Ericsson NT announced the signing of several contracts in the field of digital transformation of public administration and services.

In June and July, Ericsson NT announced the signing of several new contracts in the segment of digital transformation for public administration and services. These contracts have a total value of over EUR 6.8 million, excluding VAT.

According to the press release, a two-year Framework Contract on the Maintenance of the Joint Information System of Land Registry and Cadaster (JIS) was signed with the Croatian Ministry of Justice and Public Administration and State Geodetic Administration. The agreement pertains to the maintenance of the Joint Information System of Land Registry and Cadaster (JIS). Under this contract, Ericsson NT will provide corrective, preventive, adaptive, and perfective maintenance services, as well as special services and support for the import of cadastral municipalities into JIS and the establishment of the Land Database. These services ensure the continuous operation and upkeep of all JIS functionalities, which have been developed since 2007 and significantly enhanced in recent years through funding from the World Bank and European funds. JIS serves as an internal application for approximately 2,000 employees of the client, and its publicly available part (OSS) experiences a growing number of users each year. The OSS receives more than 200 million queries annually and offers over 80 developed services to various institutions. Furthermore, more than 30 institutions regularly utilize data from JIS. Notably, JIS is one of the first systems in the Republic of Croatia in which the information system connects two institutions at the level of data and business processes.

Another significant contract was signed with the Croatian Pension Insurance Institute. The purpose of this agreement is to develop a national application that will connect to the EU Electronic Exchange of Social Security Information (EESSI) system. The successful implementation of this project will automate the generation of certificates and P5000 forms, which confirm insurance periods during an individual’s work in the Republic of Croatia. This automation will greatly expedite the process.

Additionally, Ericsson NT will collaborate with the Ministry of Labor, Pension System, Family, and Social Policy on a project aimed at creating and establishing a system for the e-delivery of collective agreements. The objective is to digitize certain aspects of the business processes related to the receipt and recording of collective agreements. The company plans to develop an information system for e-delivery and an e-database of collective agreements to streamline and modernize this process.

Lastly, Ericsson NT notes that these recent contracts underscore Ericsson NT’s commitment to leveraging its technological expertise to drive digital transformation within the public sector. By providing innovative solutions and services, the company aims to enhance efficiency, improve processes, and facilitate the seamless exchange of information in various governmental domains.

Ericsson NT share price (2023 YTD, EUR)

Source: ZSE, InterCapital Research

How Often Did SBITOP Constituents Outperform the Index in 2023?

Since the beginning of 2023, only 3 out of 8 SBITOP constituents outperformed the index more than 50% of the time.

Today, we bring you a brief overview of the performance of SBITOP and its constituents, as well as how each individual constituent performed as compared to the index as a whole. In this way, it can be seen if it was more worthwhile to invest in the index as a whole or individual companies. Of course, this does not include the inherent higher costs of investing in individual companies instead of an index fund, or an ETF that tracks the entire index.

Thus far in 2023, the SBITOP index as a whole had a return of 19.5%, and if it continues in this trend, it could end up coming close to app. 40% growth that it recorded in 2021. Even though the development thus far is quite favorable, this prediction is tricky given the number of variables influencing the index, Slovenia, and equity markets as a whole.

In this light, how did the other members perform compared to the index?

How much did individual constituents outperform/underperform compared to the index (YTD, p.p.)

Source: Bloomberg, InterCapital Research

Among the companies in the index, the largest growth on a YTD basis was recorded by Luka Koper, with an increase of 31.5%. Following them, we have Krka at 27.7%, NLB at 23.4%, and Sava Re, at 11.6%. This would mean that as compared to the index, Luka Koper recorded an 11.9 p.p. higher return, Krka 8.2 p.p. higher return, while NLB recorded a 3.9 p.p. higher return. Other companies all recorded lower returns compared to the index, with the lowest one being Equinox, which is also the only one to have a negative YTD return of 3.6%, meaning it underperformed the index by 23.1 p.p. Triglav recorded a 0.9% return in the period also underperformed the index, at 18.7 p.p.

Thus far in 2023, there have been 135 working days in Slovenia. On those days, 3 companies outperformed the index by more than 50% of the days. These 3 include Krka, NLB, and Cinkarna Celje, at 52.6%, and 50.4% for both NLB and Cinkarna Celje, respectively. Of course, as we can see above, this shouldn’t be taken in isolation as Cinkarna proves – even though it more often had positive returns compared to the index, the overall index had higher returns on its positive days, or vice versa, than Cinkarna. This does give us some indication of the company’s performance, as Equinox was the only company with a negative YTD return, and only outperformed the index on 43% of the working days.

How often do SBITOP constituents outperform the index (amount of days, %)

Source: Bloomberg, InterCapital Research

Upcoming Events – July 2023

Here you can find the dates for the upcoming events of the regional companies.

wdt_ID Date Ticker Announcement Country
8 18.7.2023 KRKG Krka ex-date Slovenia
9 20.7.2023 KRKG Krka Q2 2023 Results Slovenia
10 20.7.2023 ADPL AD Plastik General Shareholders Meeting Croatia
11 21.7.2023 PODR Podravka Q2 2023 Results Croatia
12 25.7.2023 ERNT Ericsson NT Q2 2023 Results Croatia
13 25.7.2023 ATGR Atlantic Grupa Q2 2023 Results Croatia
14 25.7.2023 TRP Teraplast Q2 2023 Results Romania
15 25.7.2023 ATPL Atlantska Plovidba Supervisory Board Meeting Croatia
16 26.7.2023 TRP Teraplast Q2 2023 Results Conference Call Romania
17 26.7.2023 ATPL Atlantska Plovidba Management Board Meeting Croatia
18 26.7.2023 ARNT Arena Hospitality Group Supervisory Board Meeting Croatia
19 27.7.2023 KOEI Končar Q2 2023 Results Croatia
20 27.7.2023 HT Hrvatski Telekom Q2 2023 Results, Conference Call for investors and analysts Croatia
21 27.7.2023 ARNT Arena Hospitality Group Q2 2023 Results Croatia
22 27.7.2023 ADPL AD Plastik Q2 2023 Results Croatia
23 28.7.2023 WINE Purcari Wineries ex-date Romania
24 28.7.2023 EQNX Equinox Q2 2023 Results Slovenia
25 28.7.2023 SNP OMV Petrom Q2 2023 Results, Conference Call Romania
26 28.7.2023 ATPL Atlantska Plovidba Q2 2023 Results Croatia
27 31.7.2023 RIVP Valamar Riviera Q2 2023 Results Croatia

Due to the nature of these events, they are subject to change (might be postponed or canceled).