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StrongPoint

StrongPoint

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.

NOKm 2020 2021e 2022e
Sales 1187 1274 1391
Sales growth (%) 6,8 7,3 9,2
EBITDA 104 121 135
EBITDA margin (%) 8,8 9,5 9,7
EBIT adj 71 82 96
EBIT adj margin (%) 6 6,4 6,9
Pretax profit 48 69 83
EPS rep 0,8 1,21 1,45
EPS growth (%) 11,3 51,4 20
EPS adj 1,04 1,37 1,61
DPS 0,65 0,8 0,9
EV/EBITDA (x) 9,8 7,9 6,9
EV/EBIT adj (x) 14,3 11,6 9,8
P/E (x) 24,7 16,3 13,6
P/E adj (x) 19 14,4 12,3
EV/sales (x) 0,9 0,8 0,7
FCF yield (%) -3,6 10,1 6,2
Dividend yield (%) 3,3 4 4,5
Net IB debt/EBITDA 1,3 0,6 0,4
N/A N/A N/A
NOKm 2020 2021e 2022e
Sales 1187 1274 1391
COGS -630 -677 -739
Gross profit 557 597 652
Other operating items -453 -476 -517
EBITDA 104 121 135
Depreciation on tangibles -38 -39 -39
Depreciation on intangibles 0 0 0
EBITA 66 82 96
Goodwill impairment charges 0 0 0
Other impairment and amortisation -10 -9 -9
EBIT 57 73 87
Other financial items -4 0 0
Net financial items -8 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 48 69 83
Tax -13 -15 -18
Net profit 36 54 65
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 36 54 65
EPS 0,8 1,21 1,45
EPS Adj 1,04 1,37 1,61
Total extraordinary items after tax -14,5 -9,1 -9,1
Tax rate (%) -26,3 -22 -22
Gross margin (%) 46,9 46,9 46,9
EBITDA margin (%) 8,8 9,5 9,7
EBITA margin (%) 5,6 6,4 6,9
EBIT margin (%) 4,8 5,7 6,2
Pretax margin (%) 4,1 5,4 5,9
Net margin (%) 3 4,2 4,6
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 6,8 7,3 9,2
EBITDA growth (%) 6,1 16,2 11,8
EBIT growth (%) 24,7 29 18,9
Net profit growth (%) 11,6 51,4 20
EPS growth (%) 11,3 51,4 20
Profitability 2020 2021 2022
ROE (%) 12,4 16,6 18,4
ROE Adj (%) 20,7 22,3 23,6
ROCE (%) 12,1 15,7 17,6
ROCE Adj(%) 17,7 19,6 21,4
ROIC (%) 10,1 13,1 16
ROIC Adj (%) 12,7 14,7 17,7
Adj earnings numbers 2020 2021 2022
EBITDA Adj 119 130 144
EBITDA Adj margin (%) 10 10,2 10,4
EBITA Adj 81 91 105
EBITA Adj margin (%) 6,8 7,2 7,5
EBIT Adj 71 82 96
EBIT Adj margin (%) 6 6,4 6,9
Pretax profit Adj 72 87 101
Net profit Adj 60 72 83
Net profit to shareholders Adj 60 72 83
Net Adj margin (%) 5 5,7 6
N/A N/A N/A
NOKm 2020 2021e 2022e
EBITDA 104 121 135
Net financial items -8 -4 -4
Paid tax -13 -15 -18
Non-cash items 0 0 0
Cash flow before change in WC 83 102 113
Change in WC -85 1 -43
Operating cash flow -2 103 70
CAPEX tangible fixed assets -13 -14 -16
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals -17 0 0
Free cash flow -32 89 55
Dividend paid -27 -29 -36
Share issues and buybacks 1 0 0
Other non cash items 27 0 0
Decrease in net IB debt -34 60 19
Balance Sheet (NOKm) 2020 2021 2022
Goodwill 153 153 153
Indefinite intangible assets 43 34 24
Definite intangible assets 0 0 0
Tangible fixed assets 107 104 102
Other fixed assets 2 2 2
Fixed assets 304 292 281
Inventories 172 187 204
Receivables 281 250 265
Other current assets 39 42 46
Cash and liquid assets 5 64 83
Total assets 800 835 879
Shareholders equity 311 336 365
Minority 0 0 0
Total equity 311 336 365
Long-term debt 91 91 91
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 5 5 5
Short-term debt 50 50 50
Accounts payable 138 149 163
Other current liabilities 205 205 205
Total liabilities and equity 800 836 879
Net IB debt 137 77 58
Net IB debt excl. pension debt 137 77 58
Capital invested 452 417 427
Working capital 148 125 146
EV breakdown 2020 2021 2022
Market cap. diluted (m) 879 879 879
Net IB debt Adj 137 77 58
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 1015 956 937
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 159,3 155,8 162,2
Capital invested turnover (%) 288,7 293,1 329,4
Capital employed turnover (%) 276,7 274,2 282,9
Inventories / sales (%) 13,1 14,1 14,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 8,8 11,3 11,2
Working capital / sales (%) 9 10,7 9,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 44 23 15,9
Net debt / market cap (%) 20,7 8,8 6,6
Equity ratio (%) 38,8 40,2 41,5
Net IB debt adj. / equity (%) 44 23 15,9
Current ratio (%) 126,1 134,5 142,9
EBITDA / net interest (%) 2663,1 3024,6 3381,2
Net IB debt / EBITDA (%) 131,4 63,7 42,9
Interest cover (%) 1689,6 2051,6 2395,5
N/A N/A N/A
NOKm 2020 2021e 2022e
Shares outstanding adj. 44 44 44
Fully diluted shares Adj 44 44 44
EPS 0,8 1,21 1,45
Dividend per share Adj 0,7 0,8 0,9
EPS Adj 1,04 1,37 1,61
BVPS 7 7,56 8,22
BVPS Adj 3,56 4,12 4,77
Net IB debt / share 3,1 1,7 1,3
Share price 14,9 19,8 19,8
Market cap. (m) 661 879 879
Valuation 2020 2021 2022
P/E 24,7 16,3 13,6
EV/sales 0,86 0,75 0,67
EV/EBITDA 9,8 7,9 6,9
EV/EBITA 15,4 11,6 9,8
EV/EBIT 18 13,1 10,8
Dividend yield (%) 3,3 4 4,5
FCF yield (%) -3,6 10,1 6,2
P/BVPS 2,83 2,62 2,41
P/BVPS Adj 5,57 4,81 4,15
P/E Adj 19 14,4 12,3
EV/EBITDA Adj 8,6 7,3 6,5
EV/EBITA Adj 12,6 10,5 8,9
EV/EBIT Adj 14,3 11,6 9,8
EV/cap. employed 2,2 2 1,9
Investment ratios 2020 2021 2022
Capex / sales 1,1 1,1 1,1
Capex / depreciation 33,8 36,4 39,5
Capex tangibles / tangible fixed assets 12,1 13,6 15,2
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 35,7 37,4 38,6
N/A N/A N/A

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Media

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

Main Shareholders - Strongpoint

Main shareholders Share capital % Voting shares % Verified
Holmen Fondsforvaltning AS 9.5 % 9.5 % 18 Jan 2021
Strømstangen AS 8.9 % 8.9 % 18 Jan 2021
Canaccord Genuity Wealth Management 4.5 % 4.5 % 30 Sep 2020
Sole Active AS 4.1 % 4.1 % 18 Jan 2021
V. Eiendom Holding AS 4.1 % 4.1 % 18 Jan 2021
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
Verdadero AS 2.6 % 2.6 % 18 Jan 2021
DNB Fonder 2.4 % 2.4 % 18 Jan 2021
Source: Holdings by Modular Finance AB