213 214 215E 216E 217E COMPANY ANALYSIS 19 August 215 Summary Formpipe Software (fpip.st) Temporary margin dip, but stable underlying development Formpipe Software s Q2 sales of 95.8 msek just beat our estimates at 93.9 msek. The firm however closed several contracts with strategic relevance in Q2. Profitability was significantly down though, with an EBIT of 5.8 msek (6.1%) compared to our expectation of 1.8 msek (11.4%). This dip is mainly due to investments in various areas and therefore a short-term issue, helping to capture future earnings. The firm s recurring revenue remained strong, reducing financial impact of such quarters. No updates to Redeye Rating. List: Small Cap Market Cap: 456 MSEK Industry: Information Technology CEO: Christian Sundin Chairman: Bo Nordlander OMXS 3 Formpipe Software 12 1 8 6 4 2 19-Aug 17-Nov 15-Feb 16-May 14-Aug Redeye Rating ( 1 points) Management Ownership Growth prospect Profitability Financial strength 7. points 4. points 6. points 5.5 points 4.5 points Key Financials 213 214 215E 216E 217E Revenue, MSEK 294 342 38 42 424 Growth 46% 16% 11% 6% 6% EBITDA 65 78 81 88 16 EBITDA margin 22% 23% 21% 22% 25% EBIT 27 33 33 44 49 EBIT margin 9% 1% 9% 11% 12% Pre-tax earnings 19 25 24 35 43 Net earnings 15 17 18 27 33 Net margin 5% 5% 5% 7% 8% Dividend/Share...4.8.13 EPS adj..3.34.35.54.67 P/E adj. 19. 17.8 25.8 16.8 13.7 EV/S 1.4 1.2 1.5 1.4 1.3 EV/EBITDA 6.5 5.5 6.9 6.3 5. Share information Share price (SEK) 9.1 Number of shares (m) 5.1 Market Cap (MSEK) 456 Net debt (MSEK) 19 Free float (%) 85 % Daily turnover ( ) 132 Analysts: Alexander Sattelmaier alexander.sattelmaier@redeye.se Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report. Redeye, Mäster Samuelsgatan 42, 1tr, Box 7141, 13 87 Stockholm. Tel +46 8-545 13 3. E-post: info@redeye.se
Redeye Rating: Background and definitions Formpipe Software The aim of a Redeye Rating is to help investors identify high-quality companies with attractive valuation. Company Qualities The aim of Company Qualities is to provide a well-structured and clear profile of a company s qualities (or operating risk) its chances of surviving and its potential for achieving long-term stable profit growth. We categorize a company s qualities on a ten-point scale based on five valuation keys; 1 Management, 2 Ownership, 3 Growth Outlook, 4 Profitability and 5 Financial Strength. Each valuation key is assessed based a number of quantitative and qualitative key factors that are weighted differently according to how important they are deemed to be. Each key factor is allocated a number of points based on its rating. The assessment of each valuation key is based on the total number of points for these individual factors. The rating scale ranges from to +1 points. The overall rating for each valuation key is indicated by the size of the bar shown in the chart. The relative size of the bars therefore reflects the rating distribution between the different valuation keys. Management Our Management rating represents an assessment of the ability of the board of directors and management to manage the company in the best interests of the shareholders. A good board and management can make a mediocre business concept profitable, while a poor board and management can even lead a strong company into crisis. The factors used to assess a company s management are: 1 Execution, 2 Capital allocation, 3 Communication, 4 Experience, 5 Leadership and 6 Integrity. Ownership Our Ownership rating represents an assessment of the ownership exercised for longer-term value creation. Owner commitment and expertise are key to a company s stability and the board s ability to take action. Companies with a dispersed ownership structure without a clear controlling shareholder have historically performed worse than the market index over time. The factors used to assess Ownership are: 1 Ownership structure, 2 Owner commitment, 3 Institutional ownership, 4 Abuse of power, 5 Reputation, and 6 Financial sustainability. Growth Outlook Our Growth Outlook rating represents an assessment of a company s potential to achieve long-term stable profit growth. Over the long-term, the share price roughly mirrors the company s earnings trend. A company that does not grow may be a good short-term investment, but is usually unwise in the long term. The factors used to assess Growth Outlook are: 1 Strategies and business model, 2 Sale potential, 3 Market growth, 4 Market position, and 5 Competitiveness. Profitability Our Profitability rating represents an assessment of how effective a company has historically utilised its capital to generate profit. Companies cannot survive if they are not profitable. The assessment of how profitable a company has been is based on a number of key ratios and criteria over a period of up to the past five years: 1 Return on total assets (ROA), 2 Return on equity (ROE), 3 Net profit margin, 4 Free cash flow, and 5 Operating profit margin or EBIT. Financial Strength Our Financial Strength rating represents an assessment of a company s ability to pay in the short and long term. The core of a company s financial strength is its balance sheet and cash flow. Even the greatest potential is of no benefit unless the balance sheet can cope with funding growth. The assessment of a company s financial strength is based on a number of key ratios and criteria: 1 Times-interest-coverage ratio, 2 Debt-to-equity ratio, 3 Quick ratio, 4 Current ratio, 5 Sales turnover, 6 Capital needs, 7 Cyclicality, and 8 Forthcoming binary events. 2
Solid sales performance, but pressured margins Q2 revenues were just above our estimates and on track while margins had a dip this quarter The past quarter was a rather satisfying one in our view. Several contracts with strategic relevance have been won, such as Life Science orders in the US - supplying GXPi's Sharepoint-based product X-docs a multi-municipality contract for long-term archive in Sweden the purchase of the Platina system by a Danish authority - the first time this product which is popular in Sweden is also sold in Denmark Total sales came in at 95.8 msek, which is a 14% YoY increase (estimated 8% after adjusting for the GXPi acquisition) and slightly above our estimates at 93.9 msek. Expected vs. Actual - Summary (SEKm) Q2'14 Q2'15E Actual Diff Sales 84.2 93.9 95.8 2% EBITDA 16.1 21.8 18.7-14% EBIT 6. 1.8 5.8-46% EPS.5.13.5-6% Sales growth YoY 16.1% 11.5% 13.7% EBIT margin 7.1% 11.4% 6.1% Source: Redeye Research At the same time, we were surprised by the firm s Q2 EBIT margin of 6.1%, compared to our estimates at 11.4%. The drop compared to the strong previous quarters is according to the company however not a long-term one. Instead, it is caused by investments in product, talent and an intensive pre-summer tendering period, which impacted the hours chargeable to clients. Performance by segment (SEKm) 213 Q1'14 Q2'14 Q3'14 Q4'14 214 Q1'15 Q2'15 SWEDEN Sales (ext & int) 111 28 31 32 44 135 33 34 YoY growth 2.4% 11.4% 16.3% 24.1% 31.8% 21.6% 16.8% 9.7% EBITDA 25 8 6 7 12 33 9 1 Margin 22.1% 29.% 2.5% 21.3% 27.2% 24.6% 28.% 28.1% DENMARK Sales (ext & int) 187 52 54 51 55 211 57 59 YoY growth 71.9% 2.6% 15.9% 11.6% 4.4% 12.7% 1.1% 9.3% EBITDA 4 9 8 11 17 45 15 1 Margin 21.4% 17.2% 15.3% 21.% 31.2% 21.3% 26.4% 17.7% LIFE SCIENCE Sales (ext & int) n/a n/a n/a n/a n/a 4 5 YoY growth n/a n/a n/a n/a n/a n/a 1529.4% 423.9% EBITDA n/a -2 n/a n/a n/a n/a -2-1 Margin n/a -763.9% n/a n/a n/a n/a -39.2% -3.1% Source: Redeye research Note: differences in 214 Sweden numbers compared to earlier reports are due to separate reporting of Life Science started Q1'15. 3
Profitability dip mainly due to recruitments, product investments and chargeability issues Deviations between our forecasts and the actual revenues are rather small and cannot be tracked to an individual revenue source. At the same time, the firm writes that they had a lower level of chargeability during the period, mainly due to a number of tender offers they replied to. Lower chargeability means that a somewhat higher amount of work by their staff could not be charged to external clients, indicating that sales could have been even higher if that hadn t been the case. On the cost side, the main discrepancies compared to our forecast are personnel costs. During the past quarter, Formpipe recruited both in the Life Science team as well as for their Swedish delivery organization. The intent to recruit for the delivery organization was communicated by the firm already a while ago, but finding and securing the right talent naturally takes its time. While we anticipated certain recruitments during this year, it was therefore hard to estimate when these would be conducted. Since the firm also writes about the intent to further strengthen especially the Life Science team, we are slightly adjusting our personnel cost forecasts for the following quarters. Since personnel costs are the biggest cost driver in the firm, this results in somewhat lower margin projections for the coming periods. These are however understandable investments supporting future growth and margin potential. Increasing the Swedish delivery organization can help increase the firm s margins on projects where they have to use subcontractors or partners for delivery today. By recruiting sales related employees for the Life Science team, Formpipe further ramps up their efforts to find customers to its Life Science solution, primarily Platina QMS and X-docs. Additional factors impacting profitability in the quarter are continued focus on product development in several areas and the abovementioned chargeability issue which impacted the top line to some extent. In addition, the margins especially in the Danish business still have improvement potential (see table Performance by segment above), which the firm is continually working on. Expected vs. Actual - Revenues (SEKm) Q2'14 Q2'15E Actual Diff Support and maintenance 37.5 41.1 41.1 % License 17.2 19.9 2.9 5% Delivery 29.5 33. 33.9 3% Source: Redeye Research Expected vs. Actual - Costs (SEKm) Q2'14 Q2'15E Actual Diff Sales cost 12.2 12.2 12.6 4% Other cost 15.3 18. 18.5 3% Personnel cost 48.8 52.8 57. 8% Activated development cost 8.7 1.8 1.9 1% Source: Redeye Research 4
Activated development cost continue to lie at a higher level compared to previous years quarters, being ultimately an accounting effect, according to Formpipe caused by a harmonization of the activation principles in the Danish subsidiary according to IFRS and in alignment with the local auditors during Q4 214. Broad product portfolio, strong client and recurring revenue base and the right talent are still the firm s critical success factors Sights on continued growth based on stable basis The previous two quarters had been extremely strong in terms of both new deals signed as well as margins delivered. While this quarter looks much less spectacular in comparison, we see no reason to change our long-term view of the firm. Given its strong and broad product portfolio, as well as the steadily increasing recurring revenues, the firm is well positioned for further growth. This is not only symbolized by the continued stream of contracts signed, but also by a loyal customer base that the firms continually upsells to, based on their clients needs and ongoing product development. Since Q1 215, Formpipe has started to also report the performance of its Life Science team separately. The Life Science segment is one of the key growth opportunities for Formpipe in the near- to mid-term future. After the acquisition of UK-based GXPi in 214, Formpipe has the right competence on board to sell both towards small and medium-sized clients in the segment as well as the major players. While smaller clients will normally buy the cloud-based X-docs solution developed by GXPi, Formpipe also wants to position its Platina QMS product with the major players in the industry. In addition, other products such as Long-Term Archive could be relevant for both customer segments over time. Based on earlier information from the firm, we had expected the new Life Science team to possibly reach breakeven on EBITDA level towards the end of this year. Given the new recruitments now communicated, we however expect that a breakeven will occur during mid-216 the earliest. A key driver of future performance in the Life Science segment will be the fact that the acquisition pricing for GXPi has been structured with a significant performance-based component. The 1.3 million GBP initial purchase price is coupled with a further maximum 3.5 million GBP performance-based earn-out. This earn-out is calculated as a 5% share of the EBITDA contribution over 3 years of the new combined Life Science team. In the purchase price specification published in Formpipe s Q4 report, the firm values the earn-out at 57% of its maximum, indicating the management s expectations of the actual contribution of the team during the next years. Renegotiated loan agreements now increasing flexibility in investment decisions Financial position Formpipe is still working on the reduction of its debt after the 212 acquisition of Traen. Interest-bearing debt is at 127. msek (152.2 msek previous quarter), leaving net debt at 18.5 msek (133.8 msek). The 5
development of this debt position is exposed to exchange rate effects, since the majority of the debt is denoted in Danish Crowns. The debt repayment has been on track, but of course has limited the possibilities of the firm to use its excess cash flow for acquisitions, product development and other business reinvestments or paying dividends. To address this, the company has managed to renegotiate its loan agreements during Q2. As a result, the yearly amortization has been decreased from 24 msek to around 15 msek. Financial forecasts Margin forecasts slightly revised - but revenue estimates and our overall view of the firm remain the same In our earlier analyses, we have commented that we expect the financial year to be a rather strong one, but that the second quarter will of course be important in confirming that assessment especially regarding margins. Given the developments in this quarter, we do not change this opinion, but have as said revised our EBIT margin forecasts to reflect for the investments the firm has communicated. This also results in a correction in our model for the contribution of the new Life Science team, which we do not expect before 216 for now. As opposed to margins, our revenue forecasts remain unchanged however. Given the somewhat better development than expected in Q2, we expect around 11% full-year revenue growth. This is higher than before the reinforced investment in the Life Science offering through the GXPi acquisition, but below the 13.7% growth achieved in 214 (adjusted for the GXPi acquisition). Our adjusted margin prediction for the full year lies at around 9% (11.4% earlier). Looking beyond 215, our forecasted mid- and long-term trend in profitability is in line with earlier comments by the firm. CEO Christian Sundin repeatedly commented that continued profitability improvements can be expected especially in the Danish operations as well as from increased traction in sales for both Life Science and e-archiving solutions. Actuals & Forecasts (SEKm) 213 Q1'14 Q2'14 Q3'14 Q4'14 214 Q1'15 Q2'15 Q3'15E Q4'15E 215E Sales 294 79 84 82 97 342 94 96 85 15 38 EBITDA 65 15 16 17 29 77 23 19 16 24 81 EBIT 27 5 6 5 17 33 1 6 5 13 33 PTP 19 3 4 3 14 25 8 4 2 11 25 EPS (SEK).3.5.5.5.19.34.11.5.3.16.35 Sales growth YoY 46% 18% 16% 16% 16% 16% 19% 14% 4% 8% 11% EBIT margin 9.3% 6.7% 7.1% 6.5% 17.3% 9.8% 1.6% 6.1% 5.4% 12.4% 8.8% EPS growth YoY 7% 978% 58% -5% 15% 14% 115% -9% -34% -16% 3% Source: Redeye research New major tender by City of Stockholm, but final decision not expected in near-term future There has been a new request for tenders for the major contract regarding content management with the City of Stockholm. A first tender for this contract was initially won by Formpipe, but then the buyer decided to cancel the tender after a successful lawsuit by a competitor due to a formal issue. The new tender was open for submissions by providers until late May. 6
According to information from Formpipe, the tender has been rewritten, but still reminds of the earlier in. While Formpipe has been ranked as the best provider in the first tender, this does not guarantee an easy win in the new one, especially since parts of the bidding details have now become known to competitors. And even if Formpipe should win the new tender and has learned from the shortcomings in the previous process, competitors will of course again have the chance to file a complaint against the decision. As a result, we do not expect a final and binding decision regarding the tender in the near-term future. A high share of recurring revenues contributes to a strong cash flow and lowers the company s risk profile Formpipe s business model builds on a combination of recurring license as well as support and maintenance revenues, which the client either pays as part of a SaaS (Software as a Service) licensing model or in addition to a delivery fee for initial implementation of the software. How clients choose to negotiate the model for the recurring fees has a significant impact on Formpipe s license revenues and margins in individual quarters, but makes no major difference in the long run. The trend, in accordance with the overall software industry, goes towards more clients opting for a SaaS model, similar to hiring a solution. The analysis below focuses on the steady growth of support and maintenance revenues, which is a critical driver for long-term profitability in the firm. Close to 5% of revenues are recurring, which is a big stability factor for the firm. Quarterly revenue distribution (SEKm, left) vs. EBIT margin (right) 12 35% 1 3% 8 6 4 25% 2% 15% 1% 2 5% % Q1'8 Q4'8 Q3'9 Q2'1 Q1'11 Q4'11 Q3'12 Q2'13 Q1'14 Q4'14 Support and maintenance Delivery License revenues Adjusted EBIT margin 7
Split of recurring and non-recurring revenue vs operating cost 12. 1. 8. 6. 4. 2.. Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Recurring revenue Non-recurring revenue Operating cost (incl. capitalized work for own account, depreciation) Our DCF valuation motivates a value of 9.6 SEK per share Valuation Since the acquisition of GXPi, mainly due to its size and the chosen performance-based purchase pricing, had no major long-term effect on the debt and risk profile of Formpipe, our WACC remains at 11 percent. We calculate with an average growth of 4.6 percent between 216 and 223 and a long-term EBIT margin of 15 percent. The resulting motivated value per share is 9.6 (9.6) SEK. The bull scenario value is 16. SEK per share Bull case In our bull scenario, both the Life Science and long-term archiving propositions will get significant traction in the market and contribute to sales and profit above current expectations during the coming 1 to 2 years. The overall market conditions for the firm increase somewhat and all in all, revenues therefore increase quicker at an average rate of 6.8% over the next years while long-term average EBIT margin would be at 2%. This results in a motivated value of 16. SEK. A bear case development indicates a value of 5.8 SEK per share Bear case In our bear case, neither the long-term archiving nor the Life Science solutions get significant traction in the market during 215 or 216. The overall market remains somewhat on hold, meaning that sales growth for Formpipe Software will be slower with lower utilization in the Danish consulting organization as a result. All in all, revenues therefore increase at an average 3.4% and long-term average EBIT margin would lie at 11%. The resulting motivated value is 5.8 SEK. 8
Formpipe still misses a strong majority shareholder, which we see as a long run disadvantage Stock and owner information Formpipe Software Median turnover in Formpipe s stock during the last 12 months was at around 128 shares per day. A key weakness in the firm today is in our opinion the lack of a strong major shareholder, the addition of which would be beneficial for Formpipe in the future. During the second quarter of 215, several minor changes occurred in the firm s ownership structure. Martin Gren, founder and board member at Axis Communications, has increased his stake from 1.69% to 3.16% and the Swedish 2 nd pension fund from 4.24% to 4.67%. During Q1, Handelsbanken bought an additional 1.98% of the firm s outstanding capital, while Chalmers Foundation sold its whole 1% stake and Thomas Wernhoff and Nicklas Storåkers bought.68% and.39%, respectively. 9
Summary Redeye Rating Formpipe Software The rating consists of five valuation keys, each constituting an overall assessment of several factors that are rated on a scale of to 2 points. The maximum score for a valuation key is 1 points. Rating changes in the report No changes Management 7.p Ownership 4.p Formpipe Software's CEO Christian Sundin has a long experience from the IT sector, has worked with Formpipe since 26 and is knowledgeable about the market. The company has no specific financial goals, which would be positive to have. Management shows however a high ambition level for the firm by using both product development and acquisitions to get into new markets. The acquisition of Traen and the following equity issue however still surprised many stockholders and could have been announced through clearer communication by the company. The ownership rating for Formpipe Software is relatively weak since the company currently misses an active major shareholder, which we see as a disadvantage. On the positive side, CEO Christian Sundin, CFO Joakim Alfredson as well as Head of Sales & Marketing Erik Lindberg all have relatively high holdings in the firm's stock. The company also has a number of institutions among its major shareholders, which is positive. Growth prospect 6.p Profitability 5.5p Formpipe Software's market seems stable with underlying growth. Customers are mainly from the public sector and a big part of revenues are recurring, which creates stability in the business model. We see good growth possibilities since the company has both cross-sales opportunities between its Danish and Swedish operations after the Traen acquisition. In addition, new solutions for long-term archiving and the Life Science sector are being established in the market, but have not seen their breakthrough yet. Formpipe's profitability has been relatively stable apart from some quarters. Recurring revenues are increasing, mainly due an increase of sales through a SaaS-model (Software as a Service). This in turn can influence profitability in individual quarters quite heavily since license revenues temporarily could be lower, which has a big impact on the net margin. In the long run, we see this however as being positive for the firm's profitability. Financial strength 4.5p Before the acquisition of Traen, Formpipe Software had negative net debt. Due to the acquisition, the capital strength rating has however decreased since the debt level increased. Since the company has a clear amortization plan, we expect to increase the rating over time as the debt level decreases. 1
Income statement 213 214 215E 216E 217E Net sales 294 342 38 42 424 Total operating costs -23-264 -299-313 -318 EBITDA 65 78 81 88 16 Depreciation -37-44 -48-44 -57 Amortization -1 Impairment charges EBIT 27 33 33 44 49 Share in profits Net financial items -8-9 -1-9 -6 Exchange rate dif. -1-2 Pre-tax profit 19 25 24 35 43 Tax -3-7 -5-8 -9 Net earnings 15 17 18 27 33 Balance 213 214 215E 216E 217E Assets Current assets Cash in banks 2 26 23 2 21 Receivables 9 91 16 129 149 Inventories Other current assets Current assets 11 117 129 149 17 Fixed assets Tangible assets 3 4 4 4 4 Associated comp. Investments 1 1 1 1 1 Goodwill 449 511 511 511 511 Cap. exp. for dev. -1-1 -1-1 O intangible rights O non-current assets Total fixed assets 454 516 516 516 516 Deferred tax assets 28 25 24 24 24 Total (assets) 592 659 669 689 71 Liabilities Current liabilities Short-term debt 28 12 11 9 Accounts payable 141 186 198 21 212 O current liabilities Current liabilities 168 186 21 212 222 Long-term debt 134 143 11 12 85 O long-term liabilities 23 2 21 21 21 Convertibles Total Liabilities 325 348 341 335 327 Deferred tax liab Provisions Shareholders' equity 267 36 324 35 379 Minority interest (BS) 4 4 4 4 Minority & equity 267 31 328 353 383 Total liab & SE 592 659 669 689 71 Free cash flow 213 214 215E 216E 217E Net sales 294 342 38 42 424 Total operating -23-264 -299-313 -318 costs Depreciations total -37-45 -48-44 -57 EBIT 27 33 33 44 49 Taxes on EBIT -4-9 -7-1 -11 NOPLAT 23 25 26 34 38 Depreciation 37 45 48 44 57 Gross cash flow 6 69 74 78 95 Change in WC 16 44-3 -19-9 Gross CAPEX -5-17 -47-44 -58 Free cash flow 27 6 23 15 29 DCF valuation Cash flow, MSEK WACC (%) 1.9 % NPV FCF (215-217) 61 NPV FCF (218-224) 27 NPV FCF (225-) 336 Non-operating assets 21 Interest-bearing debt -143 Fair value estimate MSEK 482 Assumptions 215-221 (%) Average sales growth 3.8 % Fair value e. per share, SEK 9.6 EBIT margin 13.8 % Share price, SEK 9.1 Profitability 213 214 215E 216E 217E ROE 6% 6% 6% 8% 9% ROCE 6% 7% 7% 1% 1% ROIC 5% 6% 6% 8% 9% EBITDA margin 22% 23% 21% 22% 25% EBIT margin 9% 1% 9% 11% 12% Net margin 5% 5% 5% 7% 8% Data per share 213 214 215E 216E 217E EPS.3.34.35.54.67 EPS adj.3.34.35.54.67 Dividend...4.8.13 Net debt 2.89 2.33 1.99 1.86 1.45 Total shares 48.93 5.14 5.14 5.14 5.14 Valuation 213 214 215E 216E 217E EV 42.5 426.6 561.3 554.6 533.8 P/E 19. 17.8 25.8 16.8 13.7 P/E diluted 19. 17.8 25.8 16.8 13.7 P/Sales.9.9 1.2 1.1 1.1 EV/Sales 1.4 1.2 1.5 1.4 1.3 EV/EBITDA 6.5 5.5 6.9 6.3 5. EV/EBIT 15.4 12.7 16.8 12.6 1.9 P/BV 1. 1. 1.4 1.3 1.2 Share performance Growth/year 13/15e 1 month -4.2 % Net sales 13.7 % 3 month 8.3 % Operating profit adj 1.6 % 12 month 49.2 % EPS, just 8.4 % Since start of the year 49.2 % Equity 1.9 % Shareholder structure % Capital Votes Avanza Pension 9.1 % 9.1 % Handelsbanken Fonder 7.6 % 7.6 % Swedbank Robur Fonder 6.1 % 6.1 % Humle Fonder 4.8 % 4.8 % Andra AP-Fonden 4.7 % 4.7 % SEB Fonder 4.6 % 4.6 % Nordnet Pensionsförsäkring 3.7 % 3.7 % Martin Gren 3.2 % 3.2 % Marcus Wallinder 2.9 % 2.9 % Thomas Wernhoff 2.6 % 2.6 % Share information Reuters code List Small Cap Share price 9.1 Total shares, million 5.1 Market Cap, MSEK 456.3 Management & board CEO CFO IR Chairman Christian Sundin Joakim Alfredson Bo Nordlander Financial information Q3 report October 27, 215 Capital structure 213 214 215E 216E 217E Equity ratio 45% 47% 49% 51% 54% Debt/equity ratio 61% 47% 38% 32% 25% Net debt 142 117 1 93 73 Capital employed 48 427 428 447 456 Capital turnover rate.5.5.6.6.6 Growth 213 214 215E 216E 217E Sales growth 46% 16% 11% 6% 6% EPS growth (adj) 7% 14% 3% 54% 23% Analysts Alexander Sattelmaier alexander.sattelmaier@redeye.se Redeye AB Mäster Samuelsgatan 42, 1tr 111 57 Stockholm 11
Revenue & Growth (%) EBIT (adjusted) & Margin (%) 45 9,% 6 16,% 4 35 3 25 2 15 1 5 8,% 7,% 6,% 5,% 4,% 3,% 2,% 1,% 5 4 3 2 1 14,% 12,% 1,% 8,% 6,% 4,% 2,% 212 213 214 215E 216E 217E,% 212 213 214 215E 216E 217E,% Net sales Net sales growth EBIT adj EBIT margin Earnings per share Equity & debt-equity ratio (%),7,6,5,4,3,2,1 212 213 214 215E 216E 217E,7,6,5,4,3,2,1,6,5,4,3,2,1 212 213 214 215E 216E 217E 9,% 8,% 7,% 6,% 5,% 4,% 3,% 2,% 1,%,% EPS, unadjusted EPS, adjusted Equity ratio Debt-equity ratio Sales division Geographical areas License Support and maintenance Delivery Conflict of interests Alexander Sattelmaier owns shares in the company: No Redeye performs/have performed services for the Company and receives/have received compensation from the Company in connection with this. Company description Since its start in 24, Formpipe showed strong growth and increasing margins. The firm's main sales focus is in the public sector, reducing sensitivity to economic cycles. Recently, an additional focus on selected private market actors has been added with the Life Science segment. Increasing recurring revenues from support and maintenance make Formpipe's business model attractive. 12
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