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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 2019 2020e 2021e
Sales 529 681 819
Sales growth (%) 41,2 28,8 20,3
EBITDA 203 264 327
EBITDA margin (%) 38,4 38,7 39,9
EBIT adj 171 232 294
EBIT adj margin (%) 32,4 34,1 35,9
Pretax profit 171 232 294
EPS rep 2,25 3,04 3,85
EPS growth (%) 70 35,2 26,6
EPS adj 2,29 3,04 3,85
DPS 0,5 0,7 0,85
EV/EBITDA (x) 54,4 41,2 32,6
EV/EBIT adj (x) 64,5 46,8 36,3
P/E (x) 84,5 62,5 49,4
P/E adj (x) 83,1 62,5 49,4
EV/sales (x) 20,9 16 13
FCF yield (%) 1,3 1,8 2,2
Dividend yield (%) 0,3 0,4 0,4
Net IB debt/EBITDA -1,4 -1,7 -2
SEKm 2019 2020e 2021e
Sales 529 681 819
COGS 0 0 0
Gross profit 529 681 819
Other operating items -326 -417 -492
EBITDA 203 264 327
Depreciation on tangibles -1 -1 -1
Depreciation on intangibles -28 -31 -32
EBITA 173 232 294
Goodwill impairment charges 0 0 0
Other impairment and amortisation -2 0 0
EBIT 171 232 294
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 171 232 294
Tax -37 -51 -65
Net profit 134 181 229
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 134 181 229
EPS 2,25 3,04 3,85
EPS Adj 2,29 3,04 3,85
Total extraordinary items after tax 0 0 0
Tax rate (%) -21,7 -22 -22
Gross margin (%) 100 100 100
EBITDA margin (%) 38,4 38,7 39,9
EBITA margin (%) 32,8 34,1 35,9
EBIT margin (%) 32,4 34,1 35,9
Pretax margin (%) 32,3 34,1 35,9
Net margin (%) 25,3 26,6 28
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 41,2 28,8 20,3
EBITDA growth (%) 59,9 30,1 24
EBIT growth (%) 67,6 35,6 26,6
Net profit growth (%) 69,8 35,2 26,6
EPS growth (%) 70 35,2 26,6
Profitability 2019 2020 2021
ROE (%) 60,2 51 43,7
ROE Adj (%) 61,3 51 43,7
ROCE (%) 76,9 65,4 56,1
ROCE Adj(%) 78 65,4 56,1
ROIC (%) -896,7 -2173 -862,8
ROIC Adj (%) -896,7 -2173 -862,8
Adj earnings numbers 2019 2020 2021
EBITDA Adj 203 264 327
EBITDA Adj margin (%) 38,4 38,7 39,9
EBITA Adj 173 232 294
EBITA Adj margin (%) 32,8 34,1 35,9
EBIT Adj 171 232 294
EBIT Adj margin (%) 32,4 34,1 35,9
Pretax profit Adj 173 232 294
Net profit Adj 136 181 229
Net profit to shareholders Adj 136 181 229
Net Adj margin (%) 25,8 26,6 28
SEKm 2019 2020e 2021e
EBITDA 203 264 327
Net financial items 0 0 0
Paid tax -37 -51 -65
Non-cash items 8 0 0
Cash flow before change in WC 173 213 262
Change in WC -15 28 21
Operating cash flow 188 241 284
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -40 -39 -39
Acquisitions and disposals 0 0 0
Free cash flow 149 202 245
Dividend paid -21 -30 -42
Share issues and buybacks 0 0 0
Other non cash items -48 0 0
Decrease in net IB debt 80 172 203
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 93 100 105
Tangible fixed assets 5 6 7
Other fixed assets 32 32 32
Fixed assets 130 137 143
Inventories 0 0 0
Receivables 142 174 212
Other current assets 0 0 0
Cash and liquid assets 277 450 652
Total assets 549 761 1007
Shareholders equity 279 431 618
Minority 0 0 0
Total equity 279 431 618
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 270 330 389
Other current liabilities 0 0 0
Total liabilities and equity 348 402 549
Net IB debt -277 -450 -652
Net IB debt excl. pension debt -277 -450 -652
Capital invested 2 -19 -34
Working capital -127 -156 -177
EV breakdown 2019 2020 2021
Market cap. diluted (m) 11316 11316 11316
Net IB debt Adj -277 -450 -652
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 11039 10866 10664
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 111,2 104 92,7
Capital invested turnover (%) -3538,2 -8174,6 -3084,2
Capital employed turnover (%) 237,8 191,8 156,3
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 47,9 44,1 43,9
Working capital / sales (%) -25,6 -20,8 -20,3
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -99,2 -104,4 -105,5
Net debt / market cap (%) -3,6 -4 -5,8
Equity ratio (%) 50,9 56,6 61,4
Net IB debt adj. / equity (%) -99,2 -104,4 -105,5
Current ratio (%) 155,4 188,9 222,1
EBITDA / net interest (%) 191323,7 0 0
Net IB debt / EBITDA (%) -136,7 -170,4 -199,4
Interest cover (%) N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 60 60 60
Fully diluted shares Adj 60 60 60
EPS 2,25 3,04 3,85
Dividend per share Adj 0,5 0,7 0,8
EPS Adj 2,29 3,04 3,85
BVPS 4,69 7,22 10,37
BVPS Adj 3,12 5,55 8,61
Net IB debt / share -4,3 -7,2 -10,6
Share price 128,22 189,8 189,8
Market cap. (m) 7644 11316 11316
Valuation 2019 2020 2021
P/E 84,5 62,5 49,4
EV/sales 20,88 15,96 13,01
EV/EBITDA 54,4 41,2 32,6
EV/EBITA 63,6 46,8 36,3
EV/EBIT 64,5 46,8 36,3
Dividend yield (%) 0,3 0,4 0,4
FCF yield (%) 1,3 1,8 2,2
P/BVPS 40,49 26,28 18,31
P/BVPS Adj 60,79 34,18 22,04
P/E Adj 83,1 62,5 49,4
EV/EBITDA Adj 54,4 41,2 32,6
EV/EBITA Adj 63,6 46,8 36,3
EV/EBIT Adj 64,5 46,8 36,3
EV/cap. employed 39,5 25,2 17,3
Investment ratios 2019 2020 2021
Capex / sales 7,5 5,7 4,8
Capex / depreciation 135,5 122,8 117,5
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 42,6 39,2 37,3
Depreciation on intangibles / definite intangibles 30,4 30,9 30,6
Depreciation on tangibles / tangibles 21,1 17,4 18,3

Equity research

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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 21.0 % 21.0 % 31 Dec 2019
Capital Group 7.3 % 7.3 % 31 Dec 2019
Swedbank Robur Fonder 5.5 % 5.5 % 31 Dec 2019
Avanza Pension 2.5 % 2.5 % 31 Dec 2019
Peder Klas-Åke Bengtsson 2.5 % 2.5 % 31 Dec 2019
Spiltan Fonder 2.5 % 2.5 % 31 Dec 2019
Miton Asset Management 2.3 % 2.3 % 30 Sep 2019
Wasatch Advisors Inc. 2.0 % 2.0 % 30 Sep 2019
Keel Capital 1.9 % 1.9 % 30 Sep 2018
We Enable Business In Sweden AB 1.5 % 1.5 % 31 Dec 2019
Source: Holdings by Modular Finance AB

Insider list - Fortnox

Name Quantity Code Date
Magnus Gudéhn BUY 10 Dec 2019
Anna Maria Frick - 1 850 SELL 26 Apr 2019
Anna Maria Frick - 156 SELL 25 Apr 2019
Anna Maria Frick - 2 000 SELL 25 Apr 2019
Andreas Kemi + 500 BUY 22 Mar 2019
Andreas Kemi + 500 BUY 21 Mar 2019
Sofia Frick - 330 SELL 9 Nov 2018
Kerstin Elisabeth Sundberg + 2 000 BUY 20 Jun 2018
Roger Hartelius Nilsson + 50 000 BUY 1 Jun 2018
Andreas Kemi + 2 000 BUY 4 May 2018

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