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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 2020 2021e 2022e
Sales 194 214 277
Sales growth (%) 13,8 10,1 29,5
EBITDA 35 43 65
EBITDA margin (%) 18,2 20,3 23,6
EBIT adj 10 22 38
EBIT adj margin (%) 5,2 10,1 13,6
Pretax profit 5 25 37
EPS rep 0,12 0,26 0,35
EPS growth (%) 170,7 125 34,4
EPS adj 0,12 0,26 0,35
DPS 0 0 0
EV/EBITDA (x) 18,6 22,7 14,4
EV/EBIT adj (x) 65,4 45,8 25
P/E (x) 73,4 47,2 35,1
P/E adj (x) 73,4 47,2 35,1
EV/sales (x) 3,4 4,6 3,4
FCF yield (%) 4,4 -1,5 4,8
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -1,3 -0,8 -1,3
Lease adj. FCF yield (%) 3,9 -1,7 4,7
Lease adj. ND/EBITDA -1,7 -1 -1,4
DKKm 2020 2021e 2022e
Sales 194 214 277
COGS -55 -63 -83
Gross profit 139 151 194
Other operating items -104 -107 -129
EBITDA 35 43 65
Depreciation on tangibles 0 0 0
Depreciation on intangibles -24 -22 -26
EBITA 10 22 38
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 10 22 38
Other financial items 0 0 0
Net financial items -5 4 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 5 25 37
Tax 5 -4 -8
Net profit 10 22 29
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 10 22 29
EPS 0,12 0,26 0,35
EPS Adj 0,12 0,26 0,35
Total extraordinary items after tax 0 0 0
Tax rate (%) 89,2 -14,7 -22
Gross margin (%) 71,5 70,5 70
EBITDA margin (%) 18,2 20,3 23,6
EBITA margin (%) 5,2 10,1 13,6
EBIT margin (%) 5,2 10,1 13,6
Pretax margin (%) 2,6 11,9 13,5
Net margin (%) 4,9 10,1 10,5
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 13,8 10,1 29,5
EBITDA growth (%) 131,5 22,9 50,2
EBIT growth (%) 200 113,9 74,1
Net profit growth (%) 170,7 125 34,4
EPS growth (%) 170,7 125 34,4
Profitability 2020 2021 2022
ROE (%) 11,4 21 21,6
ROE Adj (%) 11,4 21 21,6
ROCE (%) 10,1 21 24,6
ROCE Adj(%) 10,1 21 24,6
ROIC (%) 32,5 26,9 35,7
ROIC Adj (%) 32,5 26,9 35,7
Adj earnings numbers 2020 2021 2022
EBITDA Adj 35 43 65
EBITDA Adj margin (%) 18,2 20,3 23,6
EBITA Adj 10 22 38
EBITA Adj margin (%) 5,2 10,1 13,6
EBIT Adj 10 22 38
EBIT Adj margin (%) 5,2 10,1 13,6
Pretax profit Adj 5 25 37
Net profit Adj 10 22 29
Net profit to shareholders Adj 10 22 29
Net Adj margin (%) 4,9 10,1 10,5
Depreciation and amortisation -25 -22 -28
Of which leasing depreciation -2 -1 -1
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 33 42 64
EBITDA lease Adj margin (%) 17,1 19,5 23
Leasing payments -2 -2 -1
DKKm 2020 2021e 2022e
EBITDA 35 43 65
Net financial items -5 4 0
Paid tax 0 0 0
Non-cash items 0 0 0
Cash flow before change in WC 30 47 65
Change in WC 17 -36 11
Operating cash flow 48 11 76
CAPEX tangible fixed assets -1 -1 0
CAPEX intangible fixed assets -15 -25 -28
Acquisitions and disposals 0 0 0
Free cash flow 31 -16 49
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 8 1 -1
Decrease in net IB debt 28 7 32
Balance Sheet (DKKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 35 36 37
Tangible fixed assets 2 2 2
Other fixed assets 6 6 6
Fixed assets 52 57 57
Inventories 19 30 17
Receivables 19 33 43
Other current assets 0 7 9
Cash and liquid assets 63 49 97
Total assets 153 177 222
Shareholders equity 90 116 153
Minority 0 0 0
Total equity 90 116 153
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 6 6 6
Short-term debt 13 14 14
Accounts payable 33 27 34
Other current liabilities 2 7 9
Total liabilities and equity 153 177 222
Net IB debt -47 -34 -82
Net IB debt excl. pension debt -47 -34 -82
Capital invested 49 88 77
Working capital 3 37 26
EV breakdown 2020 2021 2022
Market cap. diluted (m) 706 1021 1021
Net IB debt Adj -47 -34 -82
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 659 987 939
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 123,1 129,8 138,9
Capital invested turnover (%) 331,3 405,6 453
Capital employed turnover (%) 163,9 177,9 180,4
Inventories / sales (%) 7,4 7,3 5,3
Customer advances / sales (%) 0 0 0
Payables / sales (%) 13,8 13,4 10,6
Working capital / sales (%) 4,4 9,4 11,2
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -52,1 -29,2 -53,6
Net debt / market cap (%) -10,6 -3,3 -8
Equity ratio (%) 58,7 65,6 68,9
Net IB debt adj. / equity (%) -52,1 -29,2 -53,6
Current ratio (%) 201,3 239 278,1
EBITDA / net interest (%) 706,7 -1150,4 23450,9
Net IB debt / EBITDA (%) -132,2 -77,8 -125,8
Interest cover (%) 174,3 3016,8 3833
Lease liability amortisation -4 -2 -1
Other intangible assets 35 41 42
Right-of-use asset 9 8 7
Total other fixed assets 6 6 6
Leasing liability 10 8 7
Total other long-term liabilities 6 6 6
Net IB debt excl. leasing -57 -42 -89
Net IB debt / EBITDA lease Adj (%) -170,6 -100,4 -139,7
DKKm 2020 2021e 2022e
Shares outstanding adj. 83 83 83
Fully diluted shares Adj 83 83 83
EPS 0,12 0,26 0,35
Dividend per share Adj 0 0 0
EPS Adj 0,12 0,26 0,35
BVPS 1,08 1,39 1,84
BVPS Adj 0,66 0,9 1,34
Net IB debt / share -0,6 -0,4 -1
Share price 5,29 12,29 12,29
Market cap. (m) 440 1021 1021
Valuation 2020 2021 2022
P/E 73,4 47,2 35,1
EV/sales 3,39 4,62 3,39
EV/EBITDA 18,6 22,7 14,4
EV/EBITA 65,4 45,8 25
EV/EBIT 65,4 45,8 25
Dividend yield (%) 0 0 0
FCF yield (%) 4,4 -1,5 4,8
P/BVPS 7,86 8,82 6,67
P/BVPS Adj 12,84 13,61 9,18
P/E Adj 73,4 47,2 35,1
EV/EBITDA Adj 18,6 22,7 14,4
EV/EBITA Adj 65,4 45,8 25
EV/EBIT Adj 65,4 45,8 25
EV/cap. employed 5,9 7,2 5,4
Investment ratios 2020 2021 2022
Capex / sales 8,4 12,4 10
Capex / depreciation 69 129,2 104,1
Capex tangibles / tangible fixed assets 78,7 54 0
Capex intangibles / definite intangibles 43,2 62 66,1
Depreciation on intangibles / definite intangibles 67,7 50,4 63,5
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) 3,9 -1,7 4,7

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Media

Napatech - Company presentation with CEO Ray Smets
Napatech - Company presentation with CEO Ray Smets

Main shareholders - Napatech

Main shareholders Share capital % Voting shares % Verified
Verdane Capital 27.2 % 27.2 % 3 Sep 2021
Sundt AS 10.2 % 10.2 % 3 Sep 2021
SEB Fonder 8.4 % 8.4 % 31 Aug 2021
Ludvig Lorentzen AS 7.2 % 7.2 % 3 Sep 2021
Brownske Bevegelser AS 3.0 % 3.0 % 3 Sep 2021
SEBinvest 2.8 % 2.8 % 31 May 2021
Nordnet Pensionsförsäkring 2.6 % 2.6 % 3 Sep 2021
MP Pensjon PK 2.5 % 2.5 % 3 Sep 2021
Arbejdsmarkedets Tillægspension (ATP) 2.4 % 2.4 % 3 Sep 2021
Herald Investment Management 1.8 % 1.8 % 31 Mar 2021
Source: Holdings by Modular Finance AB