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Artificial Solutions

Artificial Solutions

Full-stack platform provider within artificial intelligence

Artificial Solutions is a Swedish B2B software provider and an established leader in conversational AI, which is a form of AI that enables people to converse with applications and services running on computers, mobiles, wearables and other electronic devices in a human-like, intelligent manner.

The market for AI and the company’s niche, conversational AI, look set to growth rapidly in the coming years. Today, Artificial Solutions has a proven product that has put into practice at various large corporations. We therefore expect to see high organic growth. Additionally, we would expect increased sales to result in high margins given the scalable business model. Also, rapidly growing tech companies are often the subject of M&A, and Artificial Solutions could well appear on the radar of potential buyers.

The key risks we have identified are: 1) financial risk given that the company is currently cash-flow negative, 2) technological risk, as a constantly changing market could make its products obsolete, 3) competition risk, 4) partnership risk, as Artificial Solutions is intensifying its use of partners and 5) legal risk, given that the software industry has recently been subject to regulation.

SEKm 2020 2021e 2022e
Sales 59 94 158
Sales growth (%) 20,4 59,7 67,6
EBITDA -80 -61 -8
EBITDA margin (%) -136,3 -64,5 -5,4
EBIT adj -93 -74 -21
EBIT adj margin (%) -157,7 -78,1 -13,6
Pretax profit -139 -114 -56
EPS rep -2,93 -1,9 -0,85
EPS growth (%) 60,1 35,3 54,9
EPS adj -2,93 -1,9 -0,85
DPS 0 0 0
EV/EBITDA (x) -8 -12,6 -96,1
EV/EBIT adj (x) -7 -10,4 -37,9
P/E (x) -3,3 -5,1 -11,2
P/E adj (x) -3,3 -5,1 -11,2
EV/sales (x) 11 8,2 5,2
FCF yield (%) -21,3 -17,8 -5,7
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -2,4 -3,2 -21,1
Lease adj. FCF yield (%) -21,3 -17,8 -5,7
Lease adj. ND/EBITDA -2,4 -3,2 -21,1
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 59 94 158
COGS 0 0 0
Gross profit 59 94 158
Other operating items -139 -155 -166
EBITDA -80 -61 -8
Depreciation on tangibles 0 0 0
Depreciation on intangibles -13 -13 -13
EBITA -93 -74 -21
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -93 -74 -21
Other financial items 0 0 0
Net financial items -46 -40 -35
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -139 -114 -56
Tax 0 0 0
Net profit -139 -114 -56
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -139 -114 -56
EPS -2,93 -1,9 -0,85
EPS Adj -2,93 -1,9 -0,85
Total extraordinary items after tax 0 0 0
Tax rate (%) 0,1 0 0
Gross margin (%) 100 100 100
EBITDA margin (%) -136,3 -64,5 -5,4
EBITA margin (%) -157,7 -78,1 -13,6
EBIT margin (%) -157,7 -78,1 -13,6
Pretax margin (%) -235,8 -120,6 -35,8
Net margin (%) -236,2 -120,6 -35,8
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 20,4 59,7 67,6
EBITDA growth (%) 28,4 24,5 86,1
EBIT growth (%) 36,2 20,9 70,8
Net profit growth (%) 23,3 18,5 50,3
EPS growth (%) 60,1 35,3 54,9
Profitability 2020 2021 2022
ROE (%) 74,3 59,4 28,1
ROE Adj (%) 74,3 59,4 28,1
ROCE (%) -623,1 -738,6 -1052,7
ROCE Adj(%) -623,1 -738,6 -1052,7
ROIC (%) -549,7 -24185,2 138,4
ROIC Adj (%) -549,7 -24185,2 138,4
Adj earnings numbers 2020 2021 2022
EBITDA Adj -80 -61 -8
EBITDA Adj margin (%) -136,3 -64,5 -5,4
EBITA Adj -93 -74 -21
EBITA Adj margin (%) -157,7 -78,1 -13,6
EBIT Adj -93 -74 -21
EBIT Adj margin (%) -157,7 -78,1 -13,6
Pretax profit Adj -139 -114 -56
Net profit Adj -139 -114 -56
Net profit to shareholders Adj -139 -114 -56
Net Adj margin (%) -236,2 -120,6 -35,8
Depreciation and amortisation -13 -13 -13
Of which leasing depreciation 0 0 0
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj -80 -61 -8
EBITDA lease Adj margin (%) -136,3 -64,5 -5,4
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA -80 -61 -8
Net financial items -46 -40 -35
Paid tax 0 0 0
Non-cash items 44 0 0
Cash flow before change in WC -83 -101 -43
Change in WC -1 12 22
Operating cash flow -84 -89 -22
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -13 -14 -14
Acquisitions and disposals 0 0 0
Free cash flow -97 -102 -36
Dividend paid 0 0 0
Share issues and buybacks 140 100 50
Other non cash items -14 0 0
Decrease in net IB debt 28 -2 14
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 33 34 35
Tangible fixed assets 1 1 1
Other fixed assets 6 6 6
Fixed assets 40 41 42
Inventories 0 0 0
Receivables 20 38 66
Other current assets 0 0 0
Cash and liquid assets 6 24 18
Total assets 66 102 126
Shareholders equity -184 -198 -204
Minority 0 0 0
Total equity -184 -198 -204
Long-term debt 177 197 177
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 19 19 19
Accounts payable 54 84 134
Other current liabilities 0 0 0
Total liabilities and equity 66 102 126
Net IB debt 190 193 179
Net IB debt excl. pension debt 190 193 179
Capital invested 6 -5 -26
Working capital -34 -46 -68
EV breakdown 2020 2021 2022
Market cap. diluted (m) 456 575 635
Net IB debt Adj 190 193 179
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 647 768 813
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 83,7 112 138
Capital invested turnover (%) 348,1 30967,6 -1018
Capital employed turnover (%) 264,2 612,6 2943,5
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 81,7 73 69,1
Working capital / sales (%) -38,1 -42,6 -36,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -103,2 -97,3 -87,4
Net debt / market cap (%) 42 33,5 28,2
Equity ratio (%) -280,1 -193,3 -161,9
Net IB debt adj. / equity (%) -103,2 -97,3 -87,4
Current ratio (%) 35,4 59,6 54,8
EBITDA / net interest (%) -174,5 -151,9 -24,2
Net IB debt / EBITDA (%) -236,6 -317,1 -2112,7
Interest cover (%) 0 0 0
Lease liability amortisation 0 0 0
Other intangible assets 33 34 35
Right-of-use asset 0 0 0
Total other fixed assets 6 6 6
Leasing liability 0 0 0
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing 190 193 179
Net IB debt / EBITDA lease Adj (%) -236,6 -317,1 -2112,7
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 48 60 66
Fully diluted shares Adj 48 60 66
EPS -2,93 -1,9 -0,85
Dividend per share Adj 0 0 0
EPS Adj -2,93 -1,9 -0,85
BVPS -3,88 -3,3 -3,09
BVPS Adj -4,57 -3,87 -3,63
Net IB debt / share 4 3,2 2,7
Share price 9,53 9,6 9,6
Market cap. (m) 453 575 635
Valuation 2020 2021 2022
P/E -3,3 -5,1 -11,2
EV/sales 10,96 8,15 5,15
EV/EBITDA -8 -12,6 -96,1
EV/EBITA -7 -10,4 -37,9
EV/EBIT -7 -10,4 -37,9
Dividend yield (%) 0 0 0
FCF yield (%) -21,3 -17,8 -5,7
P/BVPS -2,47 -2,91 -3,1
P/BVPS Adj -2,1 -2,48 -2,65
P/E Adj -3,3 -5,1 -11,2
EV/EBITDA Adj -8 -12,6 -96,1
EV/EBITA Adj -7 -10,4 -37,9
EV/EBIT Adj -7 -10,4 -37,9
EV/cap. employed 53,2 41,3 -103,4
Investment ratios 2020 2021 2022
Capex / sales 22,5 14,5 9,1
Capex / depreciation 105,6 107 110
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 40,4 40,2 40,4
Depreciation on intangibles / definite intangibles 38,2 37,6 36,7
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) -21,3 -17,8 -5,7
N/A N/A N/A

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Media

Artificial Solutions - Company presentation with CEO Lawrence Flynn
Artificial Solutions - Company presentation with CEO Lawrence Flynn

Main shareholders - Artificial Solutions

Main shareholders Share capital % Voting shares % Verified
Scope 34.4 % 34.4 % 28 Feb 2021
AFA Försäkring 5.2 % 5.2 % 28 Feb 2021
SEB-Stiftelsen 4.5 % 4.5 % 28 Feb 2021
C WorldWide Asset Management 2.8 % 2.8 % 28 Feb 2021
Ulf Johansson 2.4 % 2.4 % 28 Feb 2021
Johan A. Gustavsson 2.3 % 2.3 % 14 Feb 2020
Nice & Green 2.3 % 2.3 % 28 Feb 2021
John Brehmer 1.5 % 1.5 % 28 Feb 2021
Sven Härgestam 1.5 % 1.5 % 28 Feb 2021
Avanza Pension 1.4 % 1.4 % 28 Feb 2021
Source: Holdings by Modular Finance AB

Insider list - Artificial Solutions

Name Quantity Code Date
Johan A Gustavsson + 6 000 BUY 4 Mar 2021
Johan A Gustavsson + 4 000 BUY 3 Mar 2021
Johan A Gustavsson + 2 000 BUY 24 Feb 2021
Johan A Gustavsson + 5 000 BUY 23 Feb 2021
Johan A Gustavsson + 5 000 BUY 22 Feb 2021
Daniel Eriksson + 5 320 BUY 13 Jan 2021
Daniel Eriksson + 4 000 BUY 8 Jan 2021
Daniel Eriksson + 4 000 BUY 15 Dec 2020
David Parsin - 64 926 SELL 11 Dec 2020
Fredrik Törgren + 5 000 BUY 10 Dec 2020

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