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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 34 47
Sales growth (%) 159,5 37,7 39,9
EBITDA 0 1 3
EBITDA margin (%) 1,5 3,1 5,7
EBIT adj 0 1 2
EBIT adj margin (%) 0,4 2,3 5
Pretax profit 0 1 2
EPS rep 0 0,01 0,04
EPS growth (%) 107,3 198,8 203
EPS adj 0 0,01 0,04
DPS 0 0 0
EV/EBITDA (x) 145 57,4 21,6
EV/EBIT adj (x) 498,9 77,2 24,9
P/E (x) 302,1 101,1 33,4
P/E adj (x) 302,1 101,1 33,4
EV/sales (x) 2,2 1,8 1,2
FCF yield (%) 0,2 0,9 3
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -35,1 -12,7 -5,7
Lease adj. FCF yield (%) 0,1 0,8 2,8
Lease adj. ND/EBITDA -43,3 -13,8 -6
GBPm 2020 2021e 2022e
Sales 25 34 47
COGS -21 -30 -41
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 0,01 0,04
EPS Adj 0 0,01 0,04
Total extraordinary items after tax 0 0 0
Tax rate (%) 17,2 -5 -5
Gross margin (%) 13,1 12,5 12,8
EBITDA margin (%) 1,5 3,1 5,7
EBITA margin (%) 0,4 2,3 5
EBIT margin (%) 0,4 2,3 5
Pretax margin (%) 0,8 2,3 4,9
Net margin (%) 0,9 2,2 4,7
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 159,5 37,7 39,9
EBITDA growth (%) 121,2 187,5 156,8
EBIT growth (%) 103,7 635,4 200,1
Net profit growth (%) 107,7 234,5 203
EPS growth (%) 107,3 198,8 203
Profitability 2020 2021 2022
ROE (%) 2,8 5,5 14,9
ROE Adj (%) 2,8 5,5 14,9
ROCE (%) 1,3 5,8 15,6
ROCE Adj(%) 1,3 5,8 15,6
ROIC (%) 98,4 319 505,8
ROIC Adj (%) 98,4 319 505,8
Adj earnings numbers 2020 2021 2022
EBITDA Adj 0 1 3
EBITDA Adj margin (%) 1,5 3,1 5,7
EBITA Adj 0 1 2
EBITA Adj margin (%) 0,4 2,3 5
EBIT Adj 0 1 2
EBIT Adj margin (%) 0,4 2,3 5
Pretax profit Adj 0 1 2
Net profit Adj 0 1 2
Net profit to shareholders Adj 0 1 2
Net Adj margin (%) 0,9 2,2 4,7
Depreciation and amortisation 0 0 0
Of which leasing depreciation 0 0 0
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 0 1 3
EBITDA lease Adj margin (%) 1,2 2,9 5,5
Leasing payments 0 0 0
GBPm 2020 2021e 2022e
Total liabilities and equity 16 17 20
Net IB debt -13 -13 -15
Net IB debt excl. pension debt -13 -13 -15
Capital invested 0 0 1
Working capital -1 -1 -2
EV breakdown 2020 2021 2022
Market cap. diluted (m) 66 74 74
Net IB debt Adj -13 -13 -15
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 53 60 58
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 226 202,3 255,2
Capital invested turnover (%) 19415,4 14546,9 10754,1
Capital employed turnover (%) 310,3 251 315,2
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 11,8 9,6 7,5
Working capital / sales (%) -4 -3,9 -3,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -99 -97,6 -96,6
Net debt / market cap (%) -28,1 -19,4 -22,3
Equity ratio (%) 80 79,2 80,1
Net IB debt adj. / equity (%) -99 -97,6 -96,6
Current ratio (%) 466,6 444,1 464,2
EBITDA / net interest (%) -459,2 7422,6 13625,7
Net IB debt / EBITDA (%) -3505,6 -1269,6 -568,3
Interest cover (%) -133,4 5517,1 11834,5
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 1 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 10 0 0
Decrease in net IB debt 10 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 13 14 16
Total assets 16 17 20
Shareholders equity 13 14 16
Minority 0 0 0
Total equity 13 14 16
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
Lease liability amortisation 0 0 0
Other intangible assets 1 1 2
Right-of-use asset 0 0 0
Total other fixed assets 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing -13 -14 -16
Net IB debt / EBITDA lease Adj (%) -4334,4 -1384,7 -601,3
GBPm 2020 2021e 2022e
Shares outstanding adj. 44 50 50
Fully diluted shares Adj 48 53 53
EPS 0 0,01 0,04
Dividend per share Adj 0 0 0
EPS Adj 0 0,01 0,04
BVPS 0,29 0,28 0,32
BVPS Adj 0,27 0,25 0,29
Net IB debt / share -0,3 -0,3 -0,3
Share price 1,04 1,39 1,39
Market cap. (m) 46 69 69
Valuation 2020 2021 2022
P/E 302,1 101,1 33,4
EV/sales 2,16 1,78 1,23
EV/EBITDA 145 57,4 21,6
EV/EBITA 498,9 77,2 24,9
EV/EBIT 498,9 77,2 24,9
Dividend yield (%) 0 0 0
FCF yield (%) 0,2 0,9 3
P/BVPS 4,7 5,03 4,33
P/BVPS Adj 5,09 5,55 4,8
P/E Adj 302,1 101,1 33,4
EV/EBITDA Adj 145 57,4 21,6
EV/EBITA Adj 498,9 77,2 24,9
EV/EBIT Adj 498,9 77,2 24,9
EV/cap. employed 4 4,3 3,6
Investment ratios 2020 2021 2022
Capex / sales 2 1,4 1,1
Capex / depreciation 259 243,7 204,4
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 50,7 37,9 33,8
Depreciation on intangibles / definite intangibles 18 15,5 16,5
Depreciation on tangibles / tangibles 0 0 0
Lease adj. FCF yield (%) 0,1 0,8 2,8

Equity research

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Media

Flexion Mobile - Interview with CFO Niklas Koresaar following Q3 results
Flexion Mobile - Company presentation with CFO Niklas Koresaar

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
Odey Asset Management LLP 5.1 % 5.1 % 28 Feb 2021
Sjätte AP-fonden 4.6 % 4.6 % 30 Jun 2019
Handelsbanken Fonder 2.7 % 2.7 % 31 Mar 2021
eQ Asset Management Oy 2.1 % 2.1 % 31 Mar 2021
Aktia Asset Management 0.8 % 0.8 % 31 Dec 2020
Peak Asset Management 0.4 % 0.4 % 31 Mar 2021
Claes Kalborg 0.3 % 0.3 % 10 Jun 2020
Source: Holdings by Modular Finance AB