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Fortnox

Fortnox

Web-based administration software

Fortnox develops and sells software in the administration segment for small and medium sized enterprises. The company offers software for bookkeeping, CRM, archiving, invoicing, orders, time reports, webshops and client management. Through its cloud-based solution, customers can access the software and their data from any place at any time. Revenues are generated through a subscription-based model, where customers pay per system and per active user. Due to small variable costs whenever a new customer is acquired, the business model is highly scalable, giving Fortnox the potential to reach higher margins.

Many small companies in Sweden have not yet utilized the digital transformation. While Fortnox has historically had rapid growth, there is still a domestic market to grow in. Also, we see that the company has a strong competitive offering that eventually could be expanded to other markets. Two other segments that Fortnox has recently made investments in are finance and insurance. We find these segments to be interesting areas in which to expand the current customer base. This could pay off in the future, both in terms of profitability and having a fully covered offering - i.e. stickiness.

We see two major risks for Fortnox. 1) Increased competition due to a highly profitable, growing market. This could affect prices, customer growth, as well as the current customer base. 2) Expansion into the new verticals might not pay off. There is a risk that Fortnox’s investments into finance and insurance may not pay off as anticipated, mainly due to expansion outside the company’s key area.

SEKm 2020 2021e 2022e
Sales 694 940 1279
Sales growth (%) 30,4 35,5 36,1
EBITDA 332 392 571
EBITDA margin (%) 47,9 41,7 44,6
EBIT adj 265 312 479
EBIT adj margin (%) 38,3 33,2 37,5
Pretax profit 262 304 475
EPS rep 3,41 3,9 6,08
EPS growth (%) 50,9 14,4 56
EPS adj 3,47 4,04 6,19
DPS 0,75 1 1,25
EV/EBITDA (x) 83,3 87,3 59,4
EV/EBIT adj (x) 104,2 109,5 70,8
P/E (x) 135,8 145,2 93,1
P/E adj (x) 133,4 140,2 91,4
EV/sales (x) 39,9 36,4 26,5
FCF yield (%) 0,6 -0,4 1,1
Dividend yield (%) 0,2 0,2 0,2
Net IB debt/EBITDA -0,7 -0,8 -1
Lease adj. FCF yield (%) 0,6 -0,5 1
Lease adj. ND/EBITDA -1,3 -1,3 -1,4
SEKm 2020 2021e 2022e
Sales 694 940 1279
COGS 0 0 0
Gross profit 694 940 1279
Other operating items -362 -548 -708
EBITDA 332 392 571
Depreciation on tangibles -1 -1 -1
Depreciation on intangibles -55 -74 -81
EBITA 269 314 486
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 -9 -12
EBIT 265 309 479
Other financial items 0 0 0
Net financial items -3 -5 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 262 304 475
Tax -57 -66 -105
Net profit 205 238 371
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 205 238 371
EPS 3,41 3,9 6,08
EPS Adj 3,47 4,04 6,19
Total extraordinary items after tax 0 -3,2 0
Tax rate (%) -21,7 -21,8 -22
Gross margin (%) 100 100 100
EBITDA margin (%) 47,9 41,7 44,6
EBITA margin (%) 38,8 33,4 38
EBIT margin (%) 38,3 32,9 37,5
Pretax margin (%) 37,8 32,3 37,2
Net margin (%) 29,6 25,3 29
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 30,4 35,5 36,1
EBITDA growth (%) 62,1 17,9 45,7
EBIT growth (%) 54,1 16,4 55,1
Net profit growth (%) 52,2 15,7 56
EPS growth (%) 50,9 14,4 56
Profitability 2020 2021 2022
ROE (%) 54,8 33,5 33,5
ROE Adj (%) 55,7 34,6 34,1
ROCE (%) 57,3 34,6 37
ROCE Adj(%) 58,1 35,6 37,6
ROIC (%) 121,7 48,9 52,7
ROIC Adj (%) 121,7 49,4 52,7
Adj earnings numbers 2020 2021 2022
EBITDA Adj 332 395 571
EBITDA Adj margin (%) 47,9 42 44,6
EBITA Adj 269 317 486
EBITA Adj margin (%) 38,8 33,8 38
EBIT Adj 265 312 479
EBIT Adj margin (%) 38,3 33,2 37,5
Pretax profit Adj 266 312 482
Net profit Adj 209 246 378
Net profit to shareholders Adj 209 246 378
Net Adj margin (%) 30,1 26,2 29,5
Depreciation and amortisation -63 -77 -85
Of which leasing depreciation -21 -21 -21
EO items 0 -3 0
Impairment and PPA amortisation -4 -5 -7
EBITDA lease Adj 311 373 549
EBITDA lease Adj margin (%) 44,8 39,7 42,9
Leasing payments -21 -21 -21
SEKm 2020 2021e 2022e
EBITDA 332 392 571
Net financial items -3 -5 -4
Paid tax -57 -66 -105
Non-cash items 2 0 0
Cash flow before change in WC 274 320 462
Change in WC 0 -4 4
Operating cash flow 274 316 466
CAPEX tangible fixed assets -31 -8 -10
CAPEX intangible fixed assets -65 -83 -89
Acquisitions and disposals 0 -363 0
Free cash flow 178 -138 367
Dividend paid -30 -45 -61
Share issues and buybacks 14 290 0
Other non cash items -149 -9 0
Decrease in net IB debt -31 198 304
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 239 239
Indefinite intangible assets 121 215 204
Definite intangible assets 0 0 0
Tangible fixed assets 33 40 49
Other fixed assets 1 1 1
Fixed assets 327 729 758
Inventories 0 0 0
Receivables 64 98 134
Other current assets 128 185 258
Cash and liquid assets 413 500 785
Total assets 931 1512 1935
Shareholders equity 469 952 1262
Minority 0 0 0
Total equity 469 952 1262
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 57 57 57
Other long-term liabilities 0 0 0
Short-term debt 0 0 0
Accounts payable 17 28 44
Other current liabilities 211 288 384
Total liabilities and equity 931 1512 1935
Net IB debt -236 -312 -597
Net IB debt excl. pension debt -236 -312 -597
Capital invested 291 697 722
Working capital -37 -32 -36
EV breakdown 2020 2021 2022
Market cap. diluted (m) 27885 34511 34511
Net IB debt Adj -236 -312 -597
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 27649 34199 33914
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 93,5 76,9 74,2
Capital invested turnover (%) 406 216 212,1
Capital employed turnover (%) 149,8 106,7 97
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 25,7 23,6 24,1
Payables / sales (%) 2,6 2,4 2,8
Working capital / sales (%) -8,9 -3,7 -2,7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -50,3 -32,8 -47,3
Net debt / market cap (%) -1,6 -0,9 -1,7
Equity ratio (%) 50,4 63 65,2
Net IB debt adj. / equity (%) -50,3 -32,8 -47,3
Current ratio (%) 242,9 228,2 258,2
EBITDA / net interest (%) 10178,7 7784,2 14267,2
Net IB debt / EBITDA (%) -71,1 -79,7 -104,7
Interest cover (%) 8246,8 6246,9 12152,3
Lease liability amortisation -16 -21 -21
Other intangible assets 121 268 288
Right-of-use asset 172 182 182
Total other fixed assets 1 1 1
Leasing liability 177 187 187
Total other long-term liabilities 57 57 57
Net IB debt excl. leasing -413 -500 -785
Net IB debt / EBITDA lease Adj (%) -132,8 -133,8 -142,8
SEKm 2020 2021e 2022e
Shares outstanding adj. 60 61 61
Fully diluted shares Adj 60 61 61
EPS 3,41 3,9 6,08
Dividend per share Adj 0,8 1 1,3
EPS Adj 3,47 4,04 6,19
BVPS 7,82 15,62 20,71
BVPS Adj 7,82 11,71 16,79
Net IB debt / share -3,9 -5,1 -9,8
Share price 253,38 566 566
Market cap. (m) 15210 34486 34486
Valuation 2020 2021 2022
P/E 135,8 145,2 93,1
EV/sales 39,86 36,38 26,52
EV/EBITDA 83,3 87,3 59,4
EV/EBITA 102,8 108,8 69,8
EV/EBIT 104,2 110,7 70,8
Dividend yield (%) 0,2 0,2 0,2
FCF yield (%) 0,6 -0,4 1,1
P/BVPS 59,16 36,23 27,33
P/BVPS Adj 59,16 48,35 33,71
P/E Adj 133,4 140,2 91,4
EV/EBITDA Adj 83,3 86,6 59,4
EV/EBITA Adj 102,8 107,7 69,8
EV/EBIT Adj 104,2 109,5 70,8
EV/cap. employed 42,8 30 23,4
Investment ratios 2020 2021 2022
Capex / sales 13,8 9,7 7,7
Capex / depreciation 230,1 162,9 156,2
Capex tangibles / tangible fixed assets 94,2 20,9 20,4
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 15,5 2,5 2,6
Lease adj. FCF yield (%) 0,6 -0,5 1

Equity research

Read earlier research

Media

Fortnox - Interview with CEO Nils Carlsson (in Swedish)
Fortnox - Company presentation with CEO Nils Carlsson

Main shareholders - Fortnox

Main shareholders Share capital % Voting shares % Verified
Olof Hallrup 20.6 % 20.6 % 30 Sep 2021
Swedbank Robur Fonder 6.8 % 6.8 % 30 Sep 2021
Spiltan Fonder 2.3 % 2.3 % 30 Sep 2021
AMF Pension & Fonder 2.2 % 2.2 % 30 Sep 2021
Invesco 2.1 % 2.1 % 31 Aug 2021
Peder Klas-Åke Bengtsson 2.1 % 2.1 % 30 Sep 2021
Artisan Partners 2.1 % 2.1 % 30 Sep 2021
Avanza Pension 1.8 % 1.8 % 30 Sep 2021
Premier Miton Investors 1.7 % 1.7 % 30 Jun 2021
Capital Group 1.7 % 1.7 % 30 Sep 2021
Source: Holdings by Modular Finance AB

Insider list - Fortnox

Name Quantity Code Date
Karin Camilla Skoog - 1 500 SELL 18 Jun 2021
Roger Hartelius Nilsson - 15 000 SELL 17 Jun 2021
Karin Camilla Skoog - 1 000 SELL 17 Jun 2021
Karin Camilla Skoog - 1 000 SELL 16 Jun 2021
Karin Camilla Skoog - 2 000 SELL 16 Jun 2021
Roger Hartelius Nilsson - 50 000 Redemp 30 Apr 2021
Karin Camilla Skoog - 22 000 Redemp 30 Apr 2021
Roger Hartelius Nilsson + 50 000 Redemp 30 Apr 2021
Karin Camilla Skoog + 22 000 Redemp 30 Apr 2021
Anna Frick + 500 BUY 28 Apr 2021

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