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Flexion Mobile

Flexion Mobile

Reaching a wider Android market

Flexion is primarily a game distributor on the alternative Android market (which does not include Google Play or China). It offers game developers an opportunity to reach a wider Android market than Google Play, through its full service offering and unique technology, without any additional effort for the game developer itself. The Android mobile games market is growing strongly, with Google Play as the frontrunner. We believe that the alternative Android market has a good chance to match it, or even grow faster in percentage terms.

We believe that Flexion has established a strong market position within the alternative Android market, and is well positioned to reap the benefits of the current fragmentation trend. We regard the fiscal year 2018/19 as a proof of concept. If Flexion is able to keep broadening its game portfolio and enhance its distribution power through new channel deals, it will lead the company to a bright future.

Long-term risks include dependence on key partners, increased competition, and consolidation in the Android market. We think that key channel partners are of particular importance to Flexion, as they are limited. There is currently no direct competitor to Flexion, because it is a first-mover in a niche market, but we expect increased competition. Furthermore, the current fragmentation wave on the Android market will not last forever. Eventual consolidation is likely, which might decrease the value Flexion brings to its customers.

GBPm 2020 2021e 2022e
Sales 25 35 49
Sales growth (%) 166,2 40,1 37,8
EBITDA 0 1 3
EBITDA margin (%) 1,2 3,2 5,7
EBIT adj 0 1 2
EBIT adj margin (%) 0,2 2,4 4,9
Pretax profit 0 1 2
EPS rep 0 0,02 0,05
EPS growth (%) 101,4 1933,1 187,2
EPS adj 0 0,02 0,05
DPS 0 0 0
EV/EBITDA (x) 307,2 79,4 31,7
EV/EBIT adj (x) 2218,5 107,1 36,9
P/E (x) 2438 119,9 41,8
P/E adj (x) 2438 119,9 41,8
EV/sales (x) 3,6 2,6 1,8
FCF yield (%) 0 0,8 2,4
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -10,2 -3,1 -2
N/A N/A N/A
GBPm 2020 2021e 2022e
Sales 25 35 49
COGS -22 -31 -43
Gross profit 3 4 6
Other operating items -3 -3 -3
EBITDA 0 1 3
Depreciation on tangibles 0 0 0
Depreciation on intangibles 0 0 0
EBITA 0 1 2
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 0 1 2
Other financial items 0 0 0
Net financial items 0 0 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 0 1 2
Tax 0 0 0
Net profit 0 1 2
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 0 1 2
EPS 0 0,02 0,05
EPS Adj 0 0,02 0,05
Total extraordinary items after tax 0 0 0
Tax rate (%) 502,2 -5 -5
Gross margin (%) 12,5 12,1 12,5
EBITDA margin (%) 1,2 3,2 5,7
EBITA margin (%) 0,2 2,4 4,9
EBIT margin (%) 0,2 2,4 4,9
Pretax margin (%) 0 2,3 4,8
Net margin (%) 0,2 2,2 4,6
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 166,2 40,1 37,8
EBITDA growth (%) 117,1 284,6 144,8
EBIT growth (%) 101,4 1959,6 183,7
Net profit growth (%) 101,4 1934,1 187,2
EPS growth (%) 101,4 1933,1 187,2
Profitability 2020 2021 2022
ROE (%) 1,4 24,4 47,6
ROE Adj (%) 1,4 24,4 47,6
ROCE (%) 1,4 24,5 47,4
ROCE Adj(%) 1,4 24,5 47,4
ROIC (%) -578,5 -877,1 1594,4
ROIC Adj (%) -578,5 -877,1 1594,4
Adj earnings numbers 2020 2021 2022
EBITDA Adj 0 1 3
EBITDA Adj margin (%) 1,2 3,2 5,7
EBITA Adj 0 1 2
EBITA Adj margin (%) 0,2 2,4 4,9
EBIT Adj 0 1 2
EBIT Adj margin (%) 0,2 2,4 4,9
Pretax profit Adj 0 1 2
Net profit Adj 0 1 2
Net profit to shareholders Adj 0 1 2
Net Adj margin (%) 0,2 2,2 4,6
N/A N/A N/A
GBPm 2020 2021e 2022e
Total liabilities and equity 6 7 10
Net IB debt -3 -4 -6
Net IB debt excl. pension debt -3 -4 -6
Capital invested 0 0 0
Working capital -1 -2 -2
EV breakdown 2020 2021 2022
Market cap. diluted (m) 94 94 94
Net IB debt Adj -3 -4 -6
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 91 90 88
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 432,4 529,6 569
Capital invested turnover (%) -59307,4 -38760,9 34224
Capital employed turnover (%) 877 1028,6 966,2
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 11,5 9,2 7,2
Working capital / sales (%) -4,3 -4,3 -3,4
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -107,4 -99,3 -95,5
Net debt / market cap (%) -7 -4,1 -6,5
Equity ratio (%) 46 49,6 59,1
Net IB debt adj. / equity (%) -107,4 -99,3 -95,5
Current ratio (%) 152,4 160,7 205,7
EBITDA / net interest (%) 855,7 5854,8 10398,7
Net IB debt / EBITDA (%) -1021,4 -314,1 -200,6
Interest cover (%) 118,5 4342,1 8939,8
EBITDA 0 1 3
Net financial items 0 0 0
Paid tax 0 0 0
Non-cash items 0 0 0
Cash flow before change in WC 0 1 3
Change in WC 0 0 0
Operating cash flow 0 1 3
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets 0 0 -1
Acquisitions and disposals 0 0 0
Free cash flow 0 1 2
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 1 0 0
Decrease in net IB debt 0 1 2
Balance Sheet (GBPm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 1 1 2
Tangible fixed assets 0 0 0
Other fixed assets 0 0 0
Fixed assets 1 2 2
Inventories 0 0 0
Receivables 2 2 2
Other current assets 0 0 0
Cash and liquid assets 3 4 6
Total assets 6 7 10
Shareholders equity 3 4 6
Minority 0 0 0
Total equity 3 4 6
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 0 0 0
Short-term debt 0 0 0
Accounts payable 3 3 4
Other current liabilities 0 0 0
N/A N/A N/A
GBPm 2020 2021e 2022e
Shares outstanding adj. 41 41 41
Fully diluted shares Adj 45 45 45
EPS 0 0,02 0,05
Dividend per share Adj 0 0 0
EPS Adj 0 0,02 0,05
BVPS 0,07 0,09 0,14
BVPS Adj 0,04 0,06 0,1
Net IB debt / share -0,1 -0,1 -0,1
Share price 1,04 2,07 2,07
Market cap. (m) 43 86 86
Valuation 2020 2021 2022
P/E 2438 119,9 41,8
EV/sales 3,59 2,55 1,81
EV/EBITDA 307,2 79,4 31,7
EV/EBITA 2218,5 107,1 36,9
EV/EBIT 2218,5 107,1 36,9
Dividend yield (%) 0 0 0
FCF yield (%) 0 0,8 2,4
P/BVPS 30,61 23,95 14,74
P/BVPS Adj 46,9 36,85 19,93
P/E Adj 2438 119,9 41,8
EV/EBITDA Adj 307,2 79,4 31,7
EV/EBITA Adj 2218,5 107,1 36,9
EV/EBIT Adj 2218,5 107,1 36,9
EV/cap. employed 30,2 23,3 14,2
Investment ratios 2020 2021 2022
Capex / sales 1,9 1,3 1,1
Capex / depreciation 268,4 244,2 204,7
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 49,1 37,9 33,9
Depreciation on intangibles / definite intangibles 17,2 15,5 16,5
Depreciation on tangibles / tangibles 0 0 0
N/A N/A N/A

Equity research

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Media

Flexion Mobile - Company presentation with CFO Niklas Koresaar
Flexion Mobile - Interview with CEO Jens Lauritzson following Q2 results

Main shareholders - Flexion Mobile

Main shareholders Share capital % Voting shares % Verified
Mobile Sensations Ltd 27.9 % 27.9 % 10 Jun 2020
Carl Palmstierna 9.0 % 9.0 % 10 Jun 2020
Avanza Pension 5.4 % 5.4 % 31 Mar 2019
Sjätte AP-fonden 4.6 % 4.6 % 30 Jun 2019
Handelsbanken Fonder 2.7 % 2.7 % 31 Dec 2020
eQ Asset Management Oy 2.4 % 2.4 % 31 Dec 2020
Evli Fonder 0.6 % 0.6 % 31 Dec 2020
Nordic Cross Asset Management 0.3 % 0.3 % 31 Dec 2020
Claes Kalborg 0.3 % 0.3 % 10 Jun 2020
Niklas Koresaar 0.2 % 0.2 % 16 Mar 2020
Source: Holdings by Modular Finance AB