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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 693 895 1161
Sales growth (%) 30,3 29 29,7
EBITDA 321 396 521
EBITDA margin (%) 46,2 44,2 44,9
EBIT adj 259 328 446
EBIT adj margin (%) 37,3 36,7 38,4
Pretax profit 255 325 442
EPS rep 3,3 4,18 5,7
EPS growth (%) 46,1 26,8 36,2
EPS adj 3,3 4,18 5,7
DPS 0,75 1 1,25
EV/EBITDA (x) 81,9 65,8 49,5
EV/EBIT adj (x) 101,5 79,5 57,9
P/E (x) 132,7 104,6 76,8
P/E adj (x) 132,7 104,6 76,8
EV/sales (x) 37,9 29,1 22,2
FCF yield (%) 0,7 0,9 1,3
Dividend yield (%) 0,2 0,2 0,3
Net IB debt/EBITDA -0,7 -1,1 -1,3
N/A N/A N/A
SEKm 2020 2021e 2022e
Sales 693 895 1161
COGS 0 0 0
Gross profit 693 895 1161
Other operating items -373 -499 -640
EBITDA 321 396 521
Depreciation on tangibles -1 -1 -1
Depreciation on intangibles -50 -56 -63
EBITA 259 328 446
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 259 328 446
Other financial items 0 0 0
Net financial items -4 -4 -4
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 255 325 442
Tax -55 -71 -97
Net profit 200 253 345
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 200 253 345
EPS 3,3 4,18 5,7
EPS Adj 3,3 4,18 5,7
Total extraordinary items after tax 0 0 0
Tax rate (%) -21,7 -22 -22
Gross margin (%) 100 100 100
EBITDA margin (%) 46,2 44,2 44,9
EBITA margin (%) 37,3 36,7 38,4
EBIT margin (%) 37,3 36,7 38,4
Pretax margin (%) 36,8 36,3 38,1
Net margin (%) 28,8 28,3 29,7
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 30,3 29 29,7
EBITDA growth (%) 56,5 23,5 31,5
EBIT growth (%) 50,2 26,9 35,9
Net profit growth (%) 48 26,8 36,2
EPS growth (%) 46,1 26,8 36,2
Profitability 2020 2021 2022
ROE (%) 54,7 45,7 43,1
ROE Adj (%) 54,7 45,7 43,1
ROCE (%) 57,1 45 45,7
ROCE Adj(%) 57,1 45 45,7
ROIC (%) 132,3 97,4 124,3
ROIC Adj (%) 132,3 97,4 124,3
Adj earnings numbers 2020 2021 2022
EBITDA Adj 321 396 521
EBITDA Adj margin (%) 46,2 44,2 44,9
EBITA Adj 259 328 446
EBITA Adj margin (%) 37,3 36,7 38,4
EBIT Adj 259 328 446
EBIT Adj margin (%) 37,3 36,7 38,4
Pretax profit Adj 255 325 442
Net profit Adj 200 253 345
Net profit to shareholders Adj 200 253 345
Net Adj margin (%) 28,8 28,3 29,7
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 321 396 521
Net financial items -4 -4 -4
Paid tax -55 -71 -97
Non-cash items 0 0 0
Cash flow before change in WC 262 321 420
Change in WC 5 7 5
Operating cash flow 266 328 425
CAPEX tangible fixed assets -25 -8 -10
CAPEX intangible fixed assets -59 -71 -77
Acquisitions and disposals 0 0 0
Free cash flow 181 248 338
Dividend paid -30 -45 -60
Share issues and buybacks 0 0 0
Other non cash items -174 0 0
Decrease in net IB debt -34 192 267
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 0 0
Indefinite intangible assets 106 122 137
Definite intangible assets 0 0 0
Tangible fixed assets 31 38 47
Other fixed assets 34 34 34
Fixed assets 346 368 392
Inventories 0 0 0
Receivables 158 209 279
Other current assets 45 63 89
Cash and liquid assets 408 600 867
Total assets 957 1240 1626
Shareholders equity 450 658 943
Minority 0 0 0
Total equity 450 658 943
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 29 42 60
Other current liabilities 265 328 411
Total liabilities and equity 957 1240 1626
Net IB debt -233 -425 -692
Net IB debt excl. pension debt -233 -425 -692
Capital invested 255 271 289
Working capital -91 -98 -103
EV breakdown 2020 2021 2022
Market cap. diluted (m) 26487 26487 26487
Net IB debt Adj -233 -425 -692
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 26254 26062 25795
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 91,9 81,5 81
Capital invested turnover (%) 453,4 340,6 414,9
Capital employed turnover (%) 153,2 122,7 119
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 27,6 27,7 27,6
Payables / sales (%) 3,5 3,9 4,4
Working capital / sales (%) -12,8 -10,5 -8,6
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -51,8 -64,6 -73,4
Net debt / market cap (%) -1,5 -1,6 -2,6
Equity ratio (%) 47,1 53,1 58
Net IB debt adj. / equity (%) -51,8 -64,6 -73,4
Current ratio (%) 195,5 224,7 252,3
EBITDA / net interest (%) 9134,4 11277,4 14835,2
Net IB debt / EBITDA (%) -72,8 -107,5 -132,9
Interest cover (%) 7368,9 9345,1 12696,3
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 60 60 60
Fully diluted shares Adj 61 61 61
EPS 3,3 4,18 5,7
Dividend per share Adj 0,8 1 1,3
EPS Adj 3,3 4,18 5,7
BVPS 7,49 10,95 15,68
BVPS Adj 7,49 10,95 15,68
Net IB debt / share -3,9 -7,1 -11,5
Share price 253,38 437,5 437,5
Market cap. (m) 15237 26309 26309
Valuation 2020 2021 2022
P/E 132,7 104,6 76,8
EV/sales 37,86 29,13 22,23
EV/EBITDA 81,9 65,8 49,5
EV/EBITA 101,5 79,5 57,9
EV/EBIT 101,5 79,5 57,9
Dividend yield (%) 0,2 0,2 0,3
FCF yield (%) 0,7 0,9 1,3
P/BVPS 58,43 39,97 27,9
P/BVPS Adj 58,43 39,97 27,9
P/E Adj 132,7 104,6 76,8
EV/EBITDA Adj 81,9 65,8 49,5
EV/EBITA Adj 101,5 79,5 57,9
EV/EBIT Adj 101,5 79,5 57,9
EV/cap. employed 42 31,3 23,1
Investment ratios 2020 2021 2022
Capex / sales 12,2 8,9 7,5
Capex / depreciation 166,6 139,9 136,6
Capex tangibles / tangible fixed assets 80,9 20,9 21,2
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 3,2 2,6 2,7
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 % 31 Dec 2020
Capital Group 8.0 % 8.0 % 31 Dec 2020
Swedbank Robur Fonder 5.9 % 5.9 % 31 Dec 2020
Spiltan Fonder 2.3 % 2.3 % 31 Dec 2020
Peder Klas-Åke Bengtsson 2.2 % 2.2 % 31 Dec 2020
Miton Asset Management 2.1 % 2.1 % 30 Sep 2020
Avanza Pension 2.0 % 2.0 % 31 Dec 2020
Invesco 1.7 % 1.7 % 30 Sep 2020
We Enable Business In Sweden AB 1.5 % 1.5 % 31 Dec 2020
Groupama Asset Management 1.4 % 1.4 % 30 Jun 2020
Source: Holdings by Modular Finance AB

Insider list - Fortnox

Name Quantity Code Date
Anna Maria Frick + 60 BUY 3 Dec 2020
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

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