Vitec Software Group
Vitec - Solid report in line with ABGSCe (ABG Sundal Collier)
2019-07-11 09:22
Sales of SEK 291m, +0.9% vs. ABGSCe
EBIT margin of 12.8%, 2.1pp y-o-y increase
Share trading above historical NTM EV/EBIT
EBIT +43.9% y-o-y to SEK 37m, for margin of 12.8%Vitec reported a solid Q2’19 report today which were in line with our expectations. Reported net sales was SEK 291m, which corresponds to a total y-o-y growth of 19.2%, and exceeded our estimate of SEK 288m by 1%. Reported group EBIT, after acquisition costs, of SEK 37m was 4% below our estimate of SEK 39m, mainly due to a deviation in the Health & Education segment which reported an EBIT of SEK 4.3m compared to our estimate of SEK 5.5m. Recurring revenues for the period increased by 22% y-o-y and amounted to SEK 228m, corresponding to 78% of net sales, which represent another step in line with Vitec’s overarching strategy.
Norwegian acquisitions strengthen Nordic position
During the period Vitec acquired two Norwegian software corporations: WIMS AS, which develops software for the insurance industry in Sweden and Norway, along with Odin Systemer As which offer products for hair and beauty salons in Norway. Through the acquisitions Vitec gained more than SEK 85m in annual sales and approximately 50 new employees. In total, Vitec now operates through 21 business units and vertical software segments.
NTM EV/EBIT of 21.7x, 20.5% above 5-year average
At the current share price, Vitec is trading at a ‘19e EV/EBIT of 20.9x based on ABGSC estimates. This is approximately 20.5% above the five-year average NTM EV/EBIT of 18.0x
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