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StrongPoint

StrongPoint

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Retail technology solutions

StrongPoint is a retail technology company that sells a wide variety of technology solutions that save costs, increase productivity, reduce theft or facilitate e-commerce sales for retailers. Its product portfolio includes electronic shelf labels, cash management systems, self-checkout terminals, click & collect lockers and digital e-commerce solutions. In addition, it holds strong positions in security cases for cash-in-transit and in adhesive labels. The company has strong positions in Norway, Sweden and the Baltics and is targeting to grow significantly in Spain.

The retail technology market is growing healthily, driven by e-commerce and a tough competitive landscape, forcing retailers to adopt new technology solutions to remain competitive. For StrongPoint, this creates a double opportunity: 1) StrongPoint delivers technology solutions that help retailers improve efficiency, and 2) StrongPoint sells e-commerce solutions to physical retailers that have their own online offerings. StrongPoint has a solid potential for future growth in Spain, which is a large and fragmented market and where the cash share is very high at 87%.

StrongPoint’s earnings are to some degree dependent on large product orders. If StrongPoint is unable to win large contracts from new or existing customers, it could pose a risk to its future sales and earnings growth. The Nordic grocery retail market is highly concentrated and several of these large chains are StrongPoint customers. Losing one of these customers could result in a significant loss of repeat business for StrongPoint. As there are some competing products, StrongPoint could be exposed to price pressure from new or existing competitors. Other risk factors include FX, macroeconomy, warranty issues and regulatory risks.

Financials

NOKm 2019 2020e 2021e
Sales 1112 1199 1290
Sales growth (%) 4,1 7,8 7,6
EBITDA 98 103 122
EBITDA margin (%) 8,8 8,6 9,5
EBIT adj 59 70 82
EBIT adj margin (%) 5,3 5,8 6,4
Pretax profit 43 46 68
EPS rep 0,72 0,79 1,18
EPS growth (%) 136,7 10,3 48,8
EPS adj 1,01 1,05 1,36
DPS 0,6 0,65 0,8
EV/EBITDA (x) 6,5 9,4 7,8
EV/EBIT adj (x) 10,8 14 11,6
P/E (x) 16,7 22,6 15,2
P/E adj (x) 11,8 17,1 13,2
EV/sales (x) 0,6 0,8 0,7
FCF yield (%) 7,5 -7,6 6
Dividend yield (%) 5 3,6 4,5
Net IB debt/EBITDA 1 1,7 1,3
N/A N/A N/A
NOKm 2019 2020e 2021e
Sales 1112 1199 1290
COGS -579 -636 -685
Gross profit 532 563 605
Other operating items -434 -459 -483
EBITDA 98 103 122
Depreciation on tangibles -39 -39 -40
Depreciation on intangibles 0 0 0
EBITA 59 65 82
Goodwill impairment charges 0 0 0
Other impairment and amortisation -14 -10 -10
EBIT 45 55 72
Other financial items 1 -4 0
Net financial items -2 -8 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 43 46 68
Tax -11 -11 -16
Net profit 32 35 52
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 32 35 52
EPS 0,72 0,79 1,18
EPS Adj 1,01 1,05 1,36
Total extraordinary items after tax -13,7 -15 -10,2
Tax rate (%) -26,1 -24,3 -23
Gross margin (%) 47,9 46,9 46,9
EBITDA margin (%) 8,8 8,6 9,5
EBITA margin (%) 5,3 5,4 6,4
EBIT margin (%) 4,1 4,6 5,6
Pretax margin (%) 3,9 3,9 5,3
Net margin (%) 2,9 2,9 4,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 4,1 7,8 7,6
EBITDA growth (%) 45,6 5,3 18
EBIT growth (%) 51,8 20,5 32,2
Net profit growth (%) 136,7 10,5 48,8
EPS growth (%) 136,7 10,3 48,8
Profitability 2019 2020 2021
ROE (%) 12 12,4 16,5
ROE Adj (%) 22,4 21,1 22,9
ROCE (%) 12,4 11,5 14,7
ROCE Adj(%) 19,7 17,1 18,9
ROIC (%) 9,4 9,7 11,5
ROIC Adj (%) 12,3 12,4 13,1
Adj earnings numbers 2019 2020 2021
EBITDA Adj 112 118 132
EBITDA Adj margin (%) 10,1 9,9 10,3
EBITA Adj 73 80 93
EBITA Adj margin (%) 6,5 6,6 7,2
EBIT Adj 59 70 82
EBIT Adj margin (%) 5,3 5,8 6,4
Pretax profit Adj 70 72 88
Net profit Adj 59 60 73
Net profit to shareholders Adj 59 60 73
Net Adj margin (%) 5,3 5 5,6
N/A N/A N/A
NOKm 2019 2020e 2021e
EBITDA 98 103 122
Net financial items -2 -8 -4
Paid tax -11 -11 -16
Non-cash items 0 0 0
Cash flow before change in WC 85 84 102
Change in WC -30 -114 -40
Operating cash flow 55 -30 62
CAPEX tangible fixed assets -16 -13 -14
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 1 -17 0
Free cash flow 40 -61 48
Dividend paid -24 -27 -29
Share issues and buybacks -1 1 0
Other non cash items -49 12 0
Decrease in net IB debt -48 -75 19
Balance Sheet (NOKm) 2019 2020 2021
Goodwill 138 151 151
Indefinite intangible assets 47 41 31
Definite intangible assets 0 0 0
Tangible fixed assets 113 111 108
Other fixed assets 7 2 2
Fixed assets 306 306 292
Inventories 138 166 181
Receivables 180 246 250
Other current assets 27 41 44
Cash and liquid assets 39 -4 14
Total assets 691 754 782
Shareholders equity 264 306 329
Minority 0 0 0
Total equity 264 306 329
Long-term debt 84 101 101
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 0 0
Short-term debt 59 72 72
Accounts payable 71 63 69
Other current liabilities 210 213 213
Total liabilities and equity 691 755 784
Net IB debt 103 178 159
Net IB debt excl. pension debt 103 178 159
Capital invested 371 483 487
Working capital 65 177 194
EV breakdown 2019 2020 2021
Market cap. diluted (m) 533 797 797
Net IB debt Adj 103 178 159
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 635 974 955
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 165,2 165,9 167,8
Capital invested turnover (%) 312,7 280,8 265,9
Capital employed turnover (%) 295,3 270,8 262,7
Inventories / sales (%) 12 12,7 13,5
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6,8 5,6 5,1
Working capital / sales (%) 5,9 10,1 14,4
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 39 58,1 48,2
Net debt / market cap (%) 22,3 22,3 19,9
Equity ratio (%) 38,2 40,5 42,1
Net IB debt adj. / equity (%) 39 58,1 48,2
Current ratio (%) 113,5 129,1 138,8
EBITDA / net interest (%) 2759,9 2454,3 2913,5
Net IB debt / EBITDA (%) 104,7 171,8 130,2
Interest cover (%) 1659,8 1534,6 1967,1
N/A N/A N/A
NOKm 2019 2020e 2021e
Shares outstanding adj. 44 44 44
Fully diluted shares Adj 44 44 44
EPS 0,72 0,79 1,18
Dividend per share Adj 0,6 0,7 0,8
EPS Adj 1,01 1,05 1,36
BVPS 5,95 6,89 7,42
BVPS Adj 2,84 3,48 4,01
Net IB debt / share 2,3 4 3,6
Share price 10,38 17,95 17,95
Market cap. (m) 460 797 797
Valuation 2019 2020 2021
P/E 16,7 22,6 15,2
EV/sales 0,57 0,81 0,74
EV/EBITDA 6,5 9,4 7,8
EV/EBITA 10,8 15,1 11,6
EV/EBIT 14 17,8 13,2
Dividend yield (%) 5 3,6 4,5
FCF yield (%) 7,5 -7,6 6
P/BVPS 2,02 2,6 2,42
P/BVPS Adj 4,23 5,16 4,48
P/E Adj 11,8 17,1 13,2
EV/EBITDA Adj 5,7 8,2 7,2
EV/EBITA Adj 8,7 12,2 10,3
EV/EBIT Adj 10,8 14 11,6
EV/cap. employed 1,6 2 1,9
Investment ratios 2019 2020 2021
Capex / sales 1,4 1,1 1,1
Capex / depreciation 39,7 33,2 35,7
Capex tangibles / tangible fixed assets 13,7 11,6 13,2
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 34,5 34,9 36,8
N/A N/A N/A

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Media

StrongPoint - Company presentation with CEO Jacob Tveraabak (in English)
StrongPoint - Company presentation with CEO Jacob Tveraabak

Main Shareholders - Strongpoint

Main shareholders Share capital % Voting shares % Verified
Holmen Fondsforvaltning AS 9.5 % 9.5 % 28 Sep 2020
Strømstangen AS 8.9 % 8.9 % 28 Sep 2020
Canaccord Genuity Wealth Management 4.5 % 4.5 % 31 Aug 2020
V. Eiendom Holding AS 4.1 % 4.1 % 28 Sep 2020
Avanza Pension 3.6 % 3.6 % 31 May 2020
Georg Zetterberg 3.6 % 3.6 % 31 May 2020
Nordnet Pensionsförsäkring 3.5 % 3.5 % 31 Dec 2019
Sole Active AS 3.3 % 3.3 % 28 Sep 2020
DNB Fonder 2.6 % 2.6 % 28 Sep 2020
Verdadero AS 2.6 % 2.6 % 28 Sep 2020
Source: Holdings by Modular Finance AB