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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 2020 2021e 2022e
Sales 1244 1195 1310
Sales growth (%) 11,9 -3,9 9,6
EBITDA 158 103 123
EBITDA margin (%) 12,7 8,6 9,4
EBIT adj 103 73 92
EBIT adj margin (%) 8,2 6,1 7
Pretax profit 76 64 81
EPS rep 1,27 1,15 1,43
EPS growth (%) 76,2 -8,9 23,9
EPS adj 0,94 1,3 1,57
DPS 0,65 0,8 0,9
EV/EBITDA (x) 5,7 13,3 11,1
EV/EBIT adj (x) 8,8 18,8 14,8
P/E (x) 15,4 26 21
P/E adj (x) 20,7 23 19,1
EV/sales (x) 0,7 1,1 1
FCF yield (%) 8 1,9 3,4
Dividend yield (%) 3,3 2,7 3
Net IB debt/EBITDA 0,2 0,4 0,2
Lease adj. FCF yield (%) 8 1,9 3,4
Lease adj. ND/EBITDA 0,2 0,3 0,2
NOKm 2020 2021e 2022e
Sales 1244 1195 1310
COGS -654 -647 -709
Gross profit 590 549 602
Other operating items -432 -446 -479
EBITDA 158 103 123
Depreciation on tangibles -39 -36 -30
Depreciation on intangibles 0 0 0
EBITA 101 73 92
Goodwill impairment charges 0 0 0
Other impairment and amortisation -14 -10 -9
EBIT 88 65 84
Other financial items 1 43 0
Net financial items -13 -1 -3
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 76 64 81
Tax -19 -12 -18
Net profit 56 51 63
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 56 51 63
EPS 1,27 1,15 1,43
EPS Adj 0,94 1,3 1,57
Total extraordinary items after tax -14,5 -8,1 -8,1
Tax rate (%) -25,6 -19,4 -22
Gross margin (%) 47,4 45,9 45,9
EBITDA margin (%) 12,7 8,6 9,4
EBITA margin (%) 8,1 6,1 7
EBIT margin (%) 7,1 5,4 6,4
Pretax margin (%) 6,1 5,3 6,2
Net margin (%) 4,5 4,3 4,8
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 11,9 -3,9 9,6
EBITDA growth (%) 60,8 -34,8 19,1
EBIT growth (%) 94,4 -26,7 29,9
Net profit growth (%) 76,5 -8,9 23,9
EPS growth (%) 76,2 -8,9 23,9
Profitability 2020 2021 2022
ROE (%) 17,8 13,9 16,6
ROE Adj (%) 26,4 18,3 20,8
ROCE (%) 18,1 14,5 18,5
ROCE Adj(%) 24,1 18 22
ROIC (%) 16,8 12,7 15,5
ROIC Adj (%) 19,6 14,3 17
Adj earnings numbers 2020 2021 2022
EBITDA Adj 172 111 131
EBITDA Adj margin (%) 13,9 9,3 10
EBITA Adj 115 81 100
EBITA Adj margin (%) 9,2 6,8 7,6
EBIT Adj 103 73 92
EBIT Adj margin (%) 8,2 6,1 7
Pretax profit Adj 102 80 97
Net profit Adj 83 67 80
Net profit to shareholders Adj 83 67 80
Net Adj margin (%) 6,7 5,6 6,1
Depreciation and amortisation -57 -30 -31
Of which leasing depreciation 0 0 0
EO items -14 -8 -8
Impairment and PPA amortisation -12 -8 -8
EBITDA lease Adj 172 111 131
EBITDA lease Adj margin (%) 13,9 9,3 10
Leasing payments 0 0 0
NOKm 2020 2021e 2022e
EBITDA 158 103 123
Net financial items -13 -1 -3
Paid tax -19 -12 -18
Non-cash items 0 0 0
Cash flow before change in WC 126 89 102
Change in WC -49 -54 -49
Operating cash flow 77 36 53
CAPEX tangible fixed assets -8 -8 -8
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 -3 0
Free cash flow 69 25 45
Dividend paid -27 -29 -36
Share issues and buybacks 1 2 0
Other non cash items 11 4 0
Decrease in net IB debt -48 64 22
Balance Sheet (NOKm) 2020 2021 2022
Goodwill 152 142 142
Indefinite intangible assets 47 43 34
Definite intangible assets 0 0 0
Tangible fixed assets 92 75 71
Other fixed assets 7 2 2
Fixed assets 322 288 276
Inventories 145 150 162
Receivables 217 222 244
Other current assets 27 35 39
Cash and liquid assets 75 35 44
Total assets 786 731 764
Shareholders equity 366 368 396
Minority 0 0 0
Total equity 366 368 396
Long-term debt 67 66 66
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 5 5
Short-term debt 42 7 7
Accounts payable 83 68 74
Other current liabilities 220 215 215
Total liabilities and equity 786 731 766
Net IB debt 34 38 29
Net IB debt excl. pension debt 34 38 29
Capital invested 408 413 431
Working capital 86 125 155
EV breakdown 2020 2021 2022
Market cap. diluted (m) 865 1331 1331
Net IB debt Adj 34 38 29
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 899 1369 1360
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 168,6 157,6 175,3
Capital invested turnover (%) 312,7 293,8 280,2
Capital employed turnover (%) 295,3 251,3 222,5
Inventories / sales (%) 12 13,1 14,8
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6,8 8,5 11
Working capital / sales (%) 6,1 8,8 10,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 9,3 10,2 7,2
Net debt / market cap (%) 5,2 2,8 2,1
Equity ratio (%) 46,6 50,4 51,8
Net IB debt adj. / equity (%) 9,3 10,2 7,2
Current ratio (%) 134,4 153,1 165,2
EBITDA / net interest (%) 3936,7 3886,9 4630,2
Net IB debt / EBITDA (%) 21,6 36,6 23,3
Interest cover (%) 2505,8 2746,5 3476,5
Lease liability amortisation 0 0 0
Other intangible assets 42 31 23
Right-of-use asset 0 0 0
Total other fixed assets 37 39 39
Leasing liability 0 0 0
Total other long-term liabilities 8 8 8
Net IB debt excl. leasing 34 38 29
Net IB debt / EBITDA lease Adj (%) 19,8 34 21,8
NOKm 2020 2021e 2022e
Shares outstanding adj. 44 44 44
Fully diluted shares Adj 44 44 44
EPS 1,27 1,15 1,43
Dividend per share Adj 0,7 0,8 0,9
EPS Adj 0,94 1,3 1,57
BVPS 8,25 8,3 8,93
BVPS Adj 4,83 5,09 5,72
Net IB debt / share 0,8 0,8 0,6
Share price 14,9 30 30
Market cap. (m) 661 1331 1331
Valuation 2020 2021 2022
P/E 15,4 26 21
EV/sales 0,72 1,15 1,04
EV/EBITDA 5,7 13,3 11,1
EV/EBITA 8,9 18,8 14,8
EV/EBIT 10,2 21,2 16,2
Dividend yield (%) 3,3 2,7 3
FCF yield (%) 8 1,9 3,4
P/BVPS 2,36 3,62 3,36
P/BVPS Adj 4,03 5,89 5,24
P/E Adj 20,7 23 19,1
EV/EBITDA Adj 5,2 12,3 10,4
EV/EBITA Adj 7,8 16,9 13,6
EV/EBIT Adj 8,8 18,8 14,8
EV/cap. employed 1,9 3,1 2,9
Investment ratios 2020 2021 2022
Capex / sales 0,6 0,6 0,6
Capex / depreciation 13,7 24,9 27
Capex tangibles / tangible fixed assets 8,6 10 11,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 62,6 40,2 43,2
Lease adj. FCF yield (%) 8 1,9 3,4

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Media

StrongPoint - Company presentation with CEO Jacob Tveraabak
StrongPoint - Company presentation with CEO Jacob Tveraabak

Main Shareholders - Strongpoint

Main shareholders Share capital % Voting shares % Verified
Strømstangen AS 8.9 % 8.9 % 13 Sep 2021
Sole Active AS 5.0 % 5.0 % 13 Sep 2021
Canaccord Genuity Wealth Management 4.5 % 4.5 % 31 May 2021
V. Eiendom Holding AS 4.1 % 4.1 % 13 Sep 2021
Nordnet Pensionsförsäkring 3.2 % 3.2 % 31 Jul 2021
Avanza Pension 2.9 % 2.9 % 31 Jul 2021
Verdadero AS 2.6 % 2.6 % 13 Sep 2021
Georg Zetterberg 2.5 % 2.5 % 31 Jul 2021
DNB Fonder 2.5 % 2.5 % 31 Jul 2021
Jan Ring 2.3 % 2.3 % 13 Sep 2021
Source: Holdings by Modular Finance AB