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Napatech

Napatech

Smart network adapter solutions

Napatech is a tech company that develops and markets smart network adaptors and related solutions (both software and hardware). It sells primarily to large global OEMs (+140 customers), which then sell to end-users. The end-users of Napatech solutions are typically large firms within sectors such as telecommunications, financial services, and governments.

Napatech is positioned in a global market where we expect to see double-digit demand growth for the foreseeable future. If the company can grow with the market over time, we assess that it could potentially scale its operating margin significantly, towards 20%.

Napatech is a small company (<100 employees), which faces major global competition. it is uncertain whether napatech will be able to grow with the market. also, napatech needs to ramp-up and establish new market verticals in order to achieve double-digit growth over time, and its ability to achieve this is uncertain.></100>

DKKm 2019 2020e 2021e
Sales 171 200 235
Sales growth (%) 0 17,4 17,1
EBITDA 15 37 49
EBITDA margin (%) 9 18,5 21,1
EBIT adj -10 13 25
EBIT adj margin (%) -5,9 6,7 10,6
Pretax profit -14 11 24
EPS rep -0,16 0,11 0,23
EPS growth (%) 0 164,6 115,3
EPS adj -0,16 0,11 0,23
DPS 0 0 0
EV/EBITDA (x) 18 18,1 13,1
EV/EBIT adj (x) -27,3 50,1 26,1
P/E (x) -21,7 80,8 37,5
P/E adj (x) -21,7 80,8 37,5
EV/sales (x) 1,6 3,3 2,8
FCF yield (%) 3,7 3,1 2,9
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -1,3 -1 -1,2
N/A N/A N/A
DKKm 2019 2020e 2021e
Sales 171 200 235
COGS -43 -57 -69
Gross profit 127 143 166
Other operating items -112 -106 -117
EBITDA 15 37 49
Depreciation on tangibles 0 0 0
Depreciation on intangibles -23 -22 -23
EBITA -10 13 25
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -10 13 25
Other financial items 0 0 0
Net financial items -4 -3 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -14 11 24
Tax 1 -2 -5
Net profit -14 9 19
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -14 9 19
EPS -0,16 0,11 0,23
EPS Adj -0,16 0,11 0,23
Total extraordinary items after tax 0 0 0
Tax rate (%) -4,6 -16,5 -22
Gross margin (%) 74,5 71,6 70,8
EBITDA margin (%) 9 18,5 21,1
EBITA margin (%) -5,9 6,7 10,6
EBIT margin (%) -5,9 6,7 10,6
Pretax margin (%) -8,4 5,3 10,3
Net margin (%) -8 4,4 8,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 0 17,4 17,1
EBITDA growth (%) -84,3 142,9 33,3
EBIT growth (%) 0 232,7 86,3
Net profit growth (%) 0 164,6 115,3
EPS growth (%) 0 164,6 115,3
Profitability 2019 2020 2021
ROE (%) -17,3 10,4 18,5
ROE Adj (%) -17,3 10,4 18,5
ROCE (%) -7,7 11,8 19,3
ROCE Adj(%) -7,7 11,8 19,3
ROIC (%) -14,5 17,7 32,5
ROIC Adj (%) -14,5 17,7 32,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 15 37 49
EBITDA Adj margin (%) 9 18,5 21,1
EBITA Adj -10 13 25
EBITA Adj margin (%) -5,9 6,7 10,6
EBIT Adj -10 13 25
EBIT Adj margin (%) -5,9 6,7 10,6
Pretax profit Adj -14 11 24
Net profit Adj -14 9 19
Net profit to shareholders Adj -14 9 19
Net Adj margin (%) -8 4,4 8,1
N/A N/A N/A
DKKm 2019 2020e 2021e
EBITDA 15 37 49
Net financial items -4 -3 -1
Paid tax -2 0 0
Non-cash items 0 0 0
Cash flow before change in WC 9 34 49
Change in WC 17 4 -4
Operating cash flow 26 38 45
CAPEX tangible fixed assets -1 -1 0
CAPEX intangible fixed assets -15 -16 -25
Acquisitions and disposals 0 0 0
Free cash flow 11 22 20
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -2 -2 0
Decrease in net IB debt 0 20 20
Balance Sheet (DKKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 41 37 38
Tangible fixed assets 1 1 1
Other fixed assets 1 1 1
Fixed assets 56 49 49
Inventories 10 12 15
Receivables 33 29 37
Other current assets 0 0 0
Cash and liquid assets 64 69 88
Total assets 163 159 188
Shareholders equity 78 90 114
Minority 0 0 0
Total equity 78 90 114
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 9 13 13
Short-term debt 33 21 21
Accounts payable 21 23 29
Other current liabilities 8 7 8
Total liabilities and equity 163 165 195
Net IB debt -19 -39 -59
Net IB debt excl. pension debt -19 -39 -59
Capital invested 68 58 61
Working capital 13 11 14
EV breakdown 2019 2020 2021
Market cap. diluted (m) 295 709 709
Net IB debt Adj -19 -39 -59
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 275 670 651
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 104,9 124,4 135,2
Capital invested turnover (%) 256,7 316,6 392,7
Capital employed turnover (%) 136,5 162,3 176
Inventories / sales (%) 5,6 5,3 5,6
Customer advances / sales (%) 0 0 0
Payables / sales (%) 12,3 11,1 11,2
Working capital / sales (%) 6,9 6 5,2
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -24,5 -43,2 -51,4
Net debt / market cap (%) -10,7 -5,5 -8,3
Equity ratio (%) 48,2 56,7 60,9
Net IB debt adj. / equity (%) -24,5 -43,2 -51,4
Current ratio (%) 162,8 200,8 223,4
EBITDA / net interest (%) 366,3 1297,1 7210,8
Net IB debt / EBITDA (%) -125,9 -104,9 -118,8
Interest cover (%) -209 357,3 1759,2
N/A N/A N/A
DKKm 2019 2020e 2021e
Shares outstanding adj. 83 83 83
Fully diluted shares Adj 83 83 83
EPS -0,16 0,11 0,23
Dividend per share Adj 0 0 0
EPS Adj -0,16 0,11 0,23
BVPS 0,94 1,09 1,38
BVPS Adj 0,45 0,64 0,92
Net IB debt / share -0,2 -0,5 -0,7
Share price 2,15 8,54 8,54
Market cap. (m) 179 709 709
Valuation 2019 2020 2021
P/E -21,7 80,8 37,5
EV/sales 1,61 3,35 2,77
EV/EBITDA 18 18,1 13,1
EV/EBITA -27,3 50,1 26,1
EV/EBIT -27,3 50,1 26,1
Dividend yield (%) 0 0 0
FCF yield (%) 3,7 3,1 2,9
P/BVPS 3,76 7,86 6,2
P/BVPS Adj 7,9 13,27 9,3
P/E Adj -21,7 80,8 37,5
EV/EBITDA Adj 18 18,1 13,1
EV/EBITA Adj -27,3 50,1 26,1
EV/EBIT Adj -27,3 50,1 26,1
EV/cap. employed 2,2 5,5 4,5
Investment ratios 2019 2020 2021
Capex / sales 9,2 8,3 10,5
Capex / depreciation 67,6 75,3 106
Capex tangibles / tangible fixed assets 42,7 52,7 0
Capex intangibles / definite intangibles 36,8 43,5 64,3
Depreciation on intangibles / definite intangibles 56,2 59,8 60,7
Depreciation on tangibles / tangibles 0 0 0
N/A N/A N/A

Equity research

Read earlier research

Media

Napatech - Company presentation with CFO Heine Thorsgaard (in English)
Napatech - Interview with CFO Heine Thorsgaard

Main shareholders - Napatech

Main shareholders Share capital % Voting shares % Verified
Verdane Capital 27.2 % 27.2 % 2 Nov 2020
Sundt AS 12.3 % 12.3 % 2 Nov 2020
Ludvig Lorentzen AS 7.2 % 7.2 % 2 Nov 2020
SEB Fonder 4.2 % 4.2 % 31 Oct 2020
Haakon Sæter 3.6 % 3.6 % 2 Nov 2020
Brownske Bevegelser AS 3.2 % 3.2 % 2 Nov 2020
Nordnet Pensionsförsäkring 2.5 % 2.5 % 2 Nov 2020
MP Pensjon PK 2.5 % 2.5 % 2 Nov 2020
Herald Investment Trust Plc 1.8 % 1.8 % 2 Nov 2020
Storebrand Asset Management 1.7 % 1.7 % 31 Oct 2020
Source: Holdings by Modular Finance AB