Q3 net turnover SEK 6m, -19.9% vs. ABGSCe

Public takeover offer at SEK 10 per share…

…results in EV/Sales 11x-6x for ‘19e-‘21e

Q3’19 net turnover of SEK 6m, EBIT of SEK -4m
Safeture reported Q3’19 net turnover of SEK 6m, 19.9% below our estimate of SEK 7.0. We had expected new agreements to provide a larger contribution, but the figure still represents 20.7% y-o-y growth. The operating costs of SEK 10m were in line with our estimate, and we think the current levels represent a new baseline based on Safeture’s recruitment of a new CEO, CFO and a larger sales and marketing organisation. We have adjusted our future opex estimates accordingly. The net turnover miss in combination with operating costs being in line resulted in an reported EBIT of SEK -4m, 35.6% below our estimate of SEK -3m. The minor EPS revision for ‘19e stems from the profitable divestment of Travelogix.

Takeover offer by majority owner Adma Förvaltning AB
Majority owner Adma Förvaltning AB announced a public takeover offer of SEK 10 per share on 25 October. Safeture’s Board of Directors opted not to recommend the offer as it did not represent the company’s potential long-term value, in their view. The board conceded, however, that the offer was not unreasonable based on the short-term financial outlook, and we agree. The offer sent the share to ‘19e-‘21e EV/Sales multiples that constitute a large premium compared to our peer group average. That said, we view the changes implemented by Safeture’s new management favourably and maintain a positive long-term outlook.

EV/Sales 10.8x-5.8x for ‘19e-‘21e, 40% premium to peers
The takeover offer has contributed to a share price gain of approximately 66.6% since the end of August. At the current share price, and based on our estimates, Safeture is trading at an EV/Sales of 10.8x-5.8x for ‘19e-‘21e. This corresponds to a premium of approximately 40% compared to the average EV/Sales multiple of our peer group consisting of Nordic SaaS-based corporations, bas
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