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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 532 693 865
Sales growth (%) 42,1 30,3 24,7
EBITDA 205 320 400
EBITDA margin (%) 38,5 46,2 46,2
EBIT adj 177 258 336
EBIT adj margin (%) 33,3 37,2 38,9
Pretax profit 172 255 333
EPS rep 2,26 3,29 4,29
EPS growth (%) 70,8 45,9 30,2
EPS adj 2,39 3,29 4,29
DPS 0,5 0,75 1
EV/EBITDA (x) 47,7 56 44,3
EV/EBIT adj (x) 55,2 69,4 52,7
P/E (x) 74,4 91,1 69,9
P/E adj (x) 70,2 91,1 69,9
EV/sales (x) 18,4 25,9 20,5
FCF yield (%) 1,4 1 1,5
Dividend yield (%) 0,3 0,3 0,3
Net IB debt/EBITDA -1,3 -0,7 -1,1
N/A N/A N/A
SEKm 2019 2020e 2021e
Sales 532 693 865
COGS 0 0 0
Gross profit 532 693 865
Other operating items -327 -373 -465
EBITDA 205 320 400
Depreciation on tangibles -2 -1 -1
Depreciation on intangibles -28 -50 -51
EBITA 175 258 336
Goodwill impairment charges 0 0 0
Other impairment and amortisation -3 0 0
EBIT 172 258 336
Other financial items 0 0 0
Net financial items 0 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 172 255 333
Tax -37 -55 -73
Net profit 135 199 260
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 135 199 260
EPS 2,26 3,29 4,29
EPS Adj 2,39 3,29 4,29
Total extraordinary items after tax -4,9 0 0
Tax rate (%) -21,6 -21,7 -22
Gross margin (%) 100 100 100
EBITDA margin (%) 38,5 46,2 46,2
EBITA margin (%) 33 37,2 38,9
EBIT margin (%) 32,4 37,2 38,9
Pretax margin (%) 32,3 36,7 38,5
Net margin (%) 25,4 28,8 30
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 42,1 30,3 24,7
EBITDA growth (%) 61,5 56,3 24,9
EBIT growth (%) 68,7 50 30,3
Net profit growth (%) 71,1 47,8 30,2
EPS growth (%) 70,8 45,9 30,2
Profitability 2019 2020 2021
ROE (%) 60,5 54,6 46,6
ROE Adj (%) 64,2 54,6 46,6
ROCE (%) 69,6 57,1 46
ROCE Adj(%) 72,8 57,1 46
ROIC (%) 291,3 132,4 101,9
ROIC Adj (%) 299,6 132,4 101,9
Adj earnings numbers 2019 2020 2021
EBITDA Adj 210 320 400
EBITDA Adj margin (%) 39,4 46,2 46,2
EBITA Adj 180 258 336
EBITA Adj margin (%) 33,9 37,2 38,9
EBIT Adj 177 258 336
EBIT Adj margin (%) 33,3 37,2 38,9
Pretax profit Adj 180 255 333
Net profit Adj 143 199 260
Net profit to shareholders Adj 143 199 260
Net Adj margin (%) 26,9 28,8 30
N/A N/A N/A
SEKm 2019 2020e 2021e
EBITDA 205 320 400
Net financial items 0 -4 -4
Paid tax -37 -55 -73
Non-cash items 11 0 0
Cash flow before change in WC 179 261 323
Change in WC 6 5 5
Operating cash flow 185 266 328
CAPEX tangible fixed assets -3 -25 -8
CAPEX intangible fixed assets -43 -59 -56
Acquisitions and disposals 0 0 0
Free cash flow 138 182 265
Dividend paid -21 -30 -45
Share issues and buybacks 0 0 0
Other non cash items -14 -174 0
Decrease in net IB debt 119 -34 208
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 97 106 110
Definite intangible assets 0 0 0
Tangible fixed assets 7 31 38
Other fixed assets 34 34 34
Fixed assets 137 345 356
Inventories 0 0 0
Receivables 116 158 202
Other current assets 32 45 61
Cash and liquid assets 267 408 617
Total assets 552 956 1236
Shareholders equity 280 450 665
Minority 0 0 0
Total equity 280 450 665
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 38 38 38
Other long-term liabilities 0 0 0
Short-term debt 0 0 0
Accounts payable 19 29 40
Other current liabilities 215 265 319
Total liabilities and equity 552 956 1236
Net IB debt -267 -233 -442
Net IB debt excl. pension debt -267 -233 -442
Capital invested 51 254 261
Working capital -86 -91 -96
EV breakdown 2019 2020 2021
Market cap. diluted (m) 10044 18163 18163
Net IB debt Adj -267 -233 -442
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 9777 17929 17721
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 111,5 91,9 78,9
Capital invested turnover (%) 1148,1 454,2 336,1
Capital employed turnover (%) 215 153,2 118,2
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 26,4 27,6 28,1
Payables / sales (%) 3,2 3,5 4
Working capital / sales (%) -14,6 -12,8 -10,8
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -95,2 -51,9 -66,5
Net debt / market cap (%) -3,5 -1,3 -2,4
Equity ratio (%) 50,8 47 53,8
Net IB debt adj. / equity (%) -95,2 -51,9 -66,5
Current ratio (%) 177,2 195,6 233
EBITDA / net interest (%) 193214,2 9125,5 11401
Net IB debt / EBITDA (%) -130,4 -72,9 -110,4
Interest cover (%) 165424,5 7360 9587
N/A N/A N/A
SEKm 2019 2020e 2021e
Shares outstanding adj. 60 60 60
Fully diluted shares Adj 60 61 61
EPS 2,26 3,29 4,29
Dividend per share Adj 0,5 0,8 1
EPS Adj 2,39 3,29 4,29
BVPS 4,69 7,48 11,05
BVPS Adj 4,69 7,48 11,05
Net IB debt / share -4,5 -3,9 -7,3
Share price 128,22 300 300
Market cap. (m) 7665 18041 18041
Valuation 2019 2020 2021
P/E 74,4 91,1 69,9
EV/sales 18,37 25,85 20,48
EV/EBITDA 47,7 56 44,3
EV/EBITA 55,8 69,4 52,7
EV/EBIT 56,8 69,4 52,7
Dividend yield (%) 0,3 0,3 0,3
FCF yield (%) 1,4 1 1,5
P/BVPS 35,81 40,09 27,15
P/BVPS Adj 35,81 40,09 27,15
P/E Adj 70,2 91,1 69,9
EV/EBITDA Adj 46,6 56 44,3
EV/EBITA Adj 54,2 69,4 52,7
EV/EBIT Adj 55,2 69,4 52,7
EV/cap. employed 34,9 28,7 21,1
Investment ratios 2019 2020 2021
Capex / sales 8,7 12,1 7,4
Capex / depreciation 157,2 165,6 121,7
Capex tangibles / tangible fixed assets 45,9 80,9 21
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 26,8 3,2 3,1
N/A N/A N/A

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 20.9 % 20.9 % 30 Sep 2020
Capital Group 8.0 % 8.0 % 30 Sep 2020
Swedbank Robur Fonder 5.8 % 5.8 % 30 Sep 2020
Groupama Asset Management 2.7 % 2.7 % 31 Mar 2020
Spiltan Fonder 2.2 % 2.2 % 30 Sep 2020
Peder Klas-Åke Bengtsson 2.2 % 2.2 % 30 Sep 2020
Avanza Pension 2.1 % 2.1 % 30 Sep 2020
Miton Asset Management 2.1 % 2.1 % 30 Jun 2020
Norges Bank 1.5 % 1.5 % 30 Sep 2020
Invesco 1.5 % 1.5 % 30 Jun 2020
Source: Holdings by Modular Finance AB

Insider list - Fortnox

Name Quantity Code Date
Andreas Kemi - 500 SELL 24 Aug 2020
Andreas Kemi - 462 SELL 24 Aug 2020
Joachim Lindow - 14 500 SELL 29 May 2020
Joachim Lindow - 1 500 SELL 28 May 2020
Jesper Svensson - 16 500 BODEL 20 May 2020
Joachim Lindow - 10 000 SELL 15 May 2020
Jesper Svensson - 190 SELL 14 May 2020
Joachim Lindow - 2 000 SELL 14 May 2020
Jesper Svensson - 3 810 SELL 14 May 2020
Jesper Svensson - 9 000 SELL 13 May 2020

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