Opus Group
Opus Group - Mixed picture in Q1 for Opus (ABG Sundal Collier)
2019-05-17 16:54
Sales of SEK 633m, -2.1% vs. ABGSCe
Reported figures distorted by one-offs
EaaS reaches ’21 target of USD 30m run rate
Sales of SEK 633m, organic y-o-y growth rate of 2.9%Opus’s Q1’19 report was in line with our expectations on a sales level, but net financials were burdened by extraordinary items. Reported sales were SEK 633m, which corresponded to a total y-o-y growth rate of 14%, and an organic growth rate of 2.9% when adjusted for acquisitions and FX effects. Sales were thus approximately 2.1% below our estimate of SEK 646m. EBITA, which is now included in Opus’s updated financial targets, was SEK 44.7m, corresponding to an EBITA margin of 13.7%, which was slightly below the company’s stated target of 15%.
One-offs in Q1 severely impact net profit
Opus suffered several one-offs in Q1’19 which severely impacted net profit, and thus EPS. Reported net profit was SEK -17m, which was considerably below our estimate of SEK 18.4m. However, net financials were burdened by SEK -16m due to the early redemption of the ’16/’21 bond. There was also SEK -3m of unrealised foreign exchange differences, and the reported income tax included a tax effect of SEK -5m relating to exchange rate gains not recognised as income but directly against equity. These one-offs amount to a total of SEK -24m, bringing adjusted net profit to SEK 7m. Furthermore, the implementation of IFRS 16 means that interest expenses for leasing liabilities of SEK -6m was, and will continue to be, included in net financials. IFRS 16 also affects Opus’s EBIT, as SEK -21m in depreciation of Right-of-Use assets needs to be included in D&A on a quarterly basis, which causes large negative revisions on EBIT. We will explain more about the IFRS 16 effects on page 3.
EV/EBITDA of 5.7x for ’19e, 25% below historical average
At the current share price, Opus is trading at a ’19e EV/EBITDA of 5.7x based on our updated estimates. This is approximately 25% below the five-year average NTM EV/EBITDA of 7.6x. Furthermore, this is a
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