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Litium

Cloud-based platform for digital commerce

Litium is primarily a software provider, which has claimed a top-three spot in the Nordic market for digital commerce platforms. The company offers its Litium On Demand solution through a cloud-based model. The market for digital commerce is growing strongly, driven by the digitalisation of business models, and a shift from physical to digital storefronts that is forcing B2B and B2C corporations to adapt to the new landscape.

We believe that Litium is well positioned to further solidify its position as a top-three provider of digital commerce platforms in the middle-market segment in the Nordics. Litium’s digital commerce platform, Litium On Demand, has been developed over several years and offers an attractive value proposition for customers. Litium operates in the fast-growing global digital commerce market, which is forecast to grow with a CAGR of 9.3% 2017-2023, driven by the structural digitalisation of society and retailer business models. Litium wants to establish itself on one non-Nordic market by 2021, which we believe will fuel further growth.

The long-term risks include financial risk, dependency on key partners, and increased competition. Litium is not currently generating positive cash flows, and additional capital will likely need to be raised. In addition, there is a risk that the company will not be able to reach its target of generating a profit in 2021. Litium is dependent on its implementation partners, which are responsible for driving sales of Litium on Demand, and are a key part of Litium’s business model. The software business is highly competitive, with a changeable landscape, which might require Litium to increase R&D investments in order to keep the digital commerce platform viable and up-to-date.

Financials

SEKm 2018 2019e 2020e
Sales 32 44 61
Sales growth (%) 33,7 39 38,7
EBITDA 1 -5 5
EBITDA margin (%) 2,9 -12,3 7,7
EBIT adj -5 -13 -3
EBIT adj margin (%) -16,9 -29,6 -5,6
Pretax profit -6 -13 -3
EPS rep -0,56 -1,33 -0,41
EPS growth (%) 3 -136,9 69,4
EPS adj -0,56 -1,33 -0,41
DPS 0 0 0
EV/EBITDA (x) 74,6 -26,6 28,1
EV/EBIT adj (x) -12,7 -11 -38,6
P/E (x) -16 -11,2 -36,6
P/E adj (x) -16 -11,2 -36,6
EV/sales (x) 2,2 3,3 2,2
FCF yield (%) -13,1 -11,8 -6,9
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -21,8 0,5 -3,1
SEKm 2018 2019e 2020e
Sales 32 44 61
COGS 0 0 0
Gross profit 32 44 61
Other operating items -31 -50 -57
EBITDA 1 -5 5
Depreciation on tangibles 0 0 0
Depreciation on intangibles -6 -8 -8
EBITA -5 -13 -3
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -5 -13 -3
Other financial items 0 0 0
Net financial items 0 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -6 -13 -3
Tax 0 0 -1
Net profit -6 -13 -4
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -6 -13 -4
EPS -0,56 -1,33 -0,41
EPS Adj -0,56 -1,33 -0,41
Total extraordinary items after tax 0 0 0
Tax rate (%) 0 0 17,1
Gross margin (%) 100 100 100
EBITDA margin (%) 2,9 -12,3 7,7
EBITA margin (%) -16,9 -29,6 -5,6
EBIT margin (%) -16,9 -29,6 -5,6
Pretax margin (%) -17,4 -29,7 -5,6
Net margin (%) -17,4 -29,7 -6,6
Growth rates Y/Y 2018 2019 2020
Sales growth (%) 33,7 39 38,7
EBITDA growth (%) -53,2 -690,4 187,1
EBIT growth (%) -47,6 -142,6 73,7
Net profit growth (%) -44,8 -136,9 69,4
EPS growth (%) 3 -136,9 69,4
Profitability 2018 2019 2020
ROE (%) -14,7 -30,5 -8,8
ROE Adj (%) -14,7 -30,5 -8,8
ROCE (%) -13,2 -28,8 -7,3
ROCE Adj(%) -13,2 -28,8 -7,3
ROIC (%) -20,7 -42 -11,1
ROIC Adj (%) -20,7 -42 -11,1
Adj earnings numbers 2018 2019 2020
EBITDA Adj 1 -5 5
EBITDA Adj margin (%) 2,9 -12,3 7,7
EBITA Adj -5 -13 -3
EBITA Adj margin (%) -16,9 -29,6 -5,6
EBIT Adj -5 -13 -3
EBIT Adj margin (%) -16,9 -29,6 -5,6
Pretax profit Adj -6 -13 -3
Net profit Adj -6 -13 -4
Net profit to shareholders Adj -6 -13 -4
Net Adj margin (%) -17,4 -29,7 -6,6
SEKm 2018 2019e 2020e
EBITDA 1 -5 5
Net financial items 0 0 0
Paid tax 0 0 -1
Non-cash items 0 0 0
Cash flow before change in WC 1 -5 4
Change in WC -1 2 2
Operating cash flow 0 -3 6
CAPEX tangible fixed assets 0 0 -1
CAPEX intangible fixed assets -12 -14 -16
Acquisitions and disposals 0 0 0
Free cash flow -12 -17 -10
Dividend paid 0 0 0
Share issues and buybacks 33 0 25
Other non cash items -4 0 -3
Decrease in net IB debt 18 -17 12
Balance Sheet (SEKm) 2018 2019 2020
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 32 38 46
Tangible fixed assets 0 1 1
Other fixed assets 0 0 0
Fixed assets 33 39 47
Inventories 0 0 0
Receivables 6 7 10
Other current assets 3 3 3
Cash and liquid assets 22 5 16
Total assets 64 54 76
Shareholders equity 50 37 54
Minority 0 0 0
Total equity 50 37 54
Long-term debt 2 1 1
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 1 1 1
Accounts payable 3 4 6
Other current liabilities 8 11 14
Total liabilities and equity 42 39 64
Net IB debt -20 -3 -15
Net IB debt excl. pension debt -20 -3 -15
Capital invested 29 33 39
Working capital -3 -6 -8
EV breakdown 2018 2019 2020
Market cap. diluted (m) 89 147 147
Net IB debt Adj -20 -3 -15
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 69 144 133
Capital efficiency (%) 2018 2019 2020
Total assets turnover (%) 61,9 75,4 94,8
Capital invested turnover (%) 122,5 142,2 169
Capital employed turnover (%) 78,1 97,6 129,6
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 18,3 17,2 17,2
Payables / sales (%) 9,4 8,2 7,7
Working capital / sales (%) -11,6 -10,4 -11,2
Financial risk and debt service 2018 2019 2020
Net debt / equity (%) -40,4 -8 -26,8
Net debt / market cap (%) -19 -2 -9,9
Equity ratio (%) 77,7 68,4 71,7
Net IB debt adj. / equity (%) -40,4 -8 -26,8
Current ratio (%) 245,5 90,4 136,1
EBITDA / net interest (%) 580,7 -8015,9 0
Net IB debt / EBITDA (%) -2179,8 54 -308
Interest cover (%) -3305,8 -15434,8 N/A
SEKm 2018 2019e 2020e
Shares outstanding adj. 10 10 10
Fully diluted shares Adj 10 10 10
EPS -0,56 -1,33 -0,41
Dividend per share Adj 0 0 0
EPS Adj -0,56 -1,33 -0,41
BVPS 5,03 3,72 5,53
BVPS Adj 1,78 -0,15 0,87
Net IB debt / share -2 -0,3 -1,5
Share price 10,72 14,95 14,95
Market cap. (m) 105 147 147
Valuation 2018 2019 2020
P/E -16 -11,2 -36,6
EV/sales 2,16 3,26 2,16
EV/EBITDA 74,6 -26,6 28,1
EV/EBITA -12,7 -11 -38,6
EV/EBIT -12,7 -11 -38,6
Dividend yield (%) 0 0 0
FCF yield (%) -13,1 -11,8 -6,9
P/BVPS 1,79 4,02 2,7
P/BVPS Adj 5,05 -102,55 17,14
P/E Adj -16 -11,2 -36,6
EV/EBITDA Adj 74,6 -26,6 28,1
EV/EBITA Adj -12,7 -11 -38,6
EV/EBIT Adj -12,7 -11 -38,6
EV/cap. employed 1,3 3,7 2,4
Investment ratios 2018 2019 2020
Capex / sales 37,3 32 27
Capex / depreciation 188,1 185,1 202,8
Capex tangibles / tangible fixed assets 72,8 50 40,9
Capex intangibles / definite intangibles 36,1 36 34,8
Depreciation on intangibles / definite intangibles 19,7 20,1 17,8
Depreciation on tangibles / tangibles 0 0 0

Equity research

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Main shareholders - Litium

Main shareholders Share capital % Voting shares % Verified
FastPartner AB 19.3 % 19.3 % 30 Sep 2019
Avanza Pension 6.9 % 6.9 % 30 Sep 2019
Mikael Lindblom 5.2 % 5.2 % 30 Sep 2019
Aktia Asset Management 5.1 % 5.1 % 30 Jun 2019
Swedbank Försäkring 4.9 % 4.9 % 30 Sep 2019
Tagehus Holding AB 4.6 % 4.6 % 30 Sep 2019
Lars Karlsson 4.5 % 4.5 % 30 Sep 2019
Fredrik Österberg 3.6 % 3.6 % 30 Sep 2019
Allan Engström 2.6 % 2.6 % 30 Sep 2019
Nordnet Pensionsförsäkring 2.2 % 2.2 % 30 Sep 2019
Source: Holdings by Modular Finance AB

Insider list - Litium

Name Quantity Code Date
Daniel Drambo - 5 744 SELL 16 Sep 2019
Johan Rutgersson + 25 000 BUY 13 Sep 2019
Daniel Drambo - 3 000 SELL 12 Sep 2019
Lars Karlsson - 16 000 SELL 19 Mar 2019
Lars Karlsson - 10 000 SELL 14 Mar 2019
Lars Karlsson - 2 000 SELL 14 Mar 2019
Lars Karlsson - 3 000 SELL 14 Mar 2019
Lars Karlsson - 2 076 SELL 14 Mar 2019
Lars Karlsson - 1 204 SELL 13 Mar 2019
Lars Karlsson - 1 000 SELL 6 Mar 2019

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