Please refer to important disclosures at the end of this report
This research product is commissioned and paid for by the company covered in this report. As such, this report is deemed to constitute an acceptable minor non-monetary benefit (i.e. not investment research) as defined in MiFID II.
Motion Display Scand. Reason: Post-results comment
Company sponsored research Not rated
Solid Q3 sales, but GM hurt by US tariffs
Sales up 23% y-o-y, but lower EBIT
Obtained order after the period, relating to Germany
We cut ’19e-’21e sales by 10-12%
Q3: sales +23% y-o-y, EBIT margin -5.2pp vs Q3’18
Motion Display (MODI) followed Q2’s strong order intake by delivering Q3 sales of SEK 12.6m (+23% y-o-y), which was 6% above our forecast.
Although this was a record Q3 in terms of sales, the EBIT margin contracted to 3.4% (8.6% in Q3’18), due to the combination of a lower gross margin and increased opex. As such, EBIT fell SEK 0.8m (or 65%) short of our expectation. Order intake amounted to SEK 6.9m (-14% y-o- y), which resulted in an order book of SEK 4.3m by the end of Q3. Here, we note that MODI received an order on the German market (with a value of SEK 1.3m) after the quarter.
Starting to gain traction in Europe
We regard the German order as positive, given that the company has recently made several initiatives in order to strengthen its position in Europe. Further traction in this market should also mitigate the
(according to the company) recently-noted prolonged sales cycles in the US (a market that accounts for the majority of MODI’s sales). We choose not to extrapolate the protracted sales cycles into our estimates, but will follow the development in detail in the coming quarters.
Estimate changes
Despite sales coming in slightly above our forecast, we have reduced
’19e-’21e sales by 10-12%, reflecting the relatively soft order intake. We have also reduced our gross margin assumptions, which have recently been hurt by the implemented US tariffs. These revisions, in combination with our slightly raised opex assumptions, have resulted in ’19e-’21e EBIT cuts of SEK 3m-5m. On our revised estimates, the share is trading at 1.3-1.7x ’19e-’21e EV/sales. Cash by end of Q3 amounted to SEK 0.1m. We think that the company will raise debt in order to strengthen its cash position.
13/11/2019
Performance Equity Research - 15 November 2019 08:35 CET
SEKm 2017 2018 2019e 2020e 2021e
Sales 29 50 32 41 46
EBITDA 0 12 -1 -0 1
EBITDA margin (%) 1.2 23.0 -3.5 -0.1 1.2
EBIT adj -2 9 -4 -3 -3
EBIT adj margin (%) -8.4 17.1 -12.7 -7.6 -5.5
Pretax profit -3 8 -4 -3 -3
EPS rep -0.26 0.81 -0.42 -0.33 -0.27
EPS adj -0.26 0.81 -0.42 -0.33 -0.27
Sales growth (%) -5.9 71.1 -36.3 28.0 12.0
EPS growth (%) -2,757.8 409.1 -151.5 20.6 16.7
Source: ABG Sundal Collier, Company data Lead analyst: Simon Granath
Estimate changes (%)
2019e 2020e 2021e
Sales -11.6% -11.6% -10.0%
EBIT (rep) n.m. n.m. n.m.
EPS (rep) n.m. n.m. n.m.
Source: ABG Sundal Collier
Share price (SEK) 4.8
Technology Hardware & Equipment, Sweden MODI.TE/MODI SS
MCap (SEKm) 50
MCap (EURm) 4.7
Net debt (EURm) 0
No. of shares (m) 10.4
Free float (%) 67.0
Av. daily volume (k) 0.1
Next event Q4 report: 20 Feb
40 60 80 100 120 140 160 180 200 220 240 260
N o v 1 6 Ja n 1 7 Ma r 1 7 Ma y 1 7 Ju l 1 7 Se p 1 7 N o v 1 7 Ja n 1 8 Ma r 1 8 Ma y 1 8 Ju l 1 8 Se p 1 8 N o v 1 8 Ja n 1 9 Ma r 1 9 Ma y 1 9 Ju l 1 9 Se p 1 9
Motion Display Scand. OMX STH PI
1m 3m 12m
Absolute (%) -7.3 -9.1 -56.2
OMX STH PI (%) 6.1 11.5 18.1
Source: FactSet
2019e 2020e 2021e
P/E (x) -11.6 -14.6 -17.5
P/E adj (x) -11.6 -14.6 -17.5
P/BVPS (x) 4.08 3.90 3.71
EV/EBITDA (x) -49.3 -934.6 102.3
EV/EBIT adj (x) -13.4 -18.2 -22.7
EV/sales (x) 1.71 1.38 1.25
ROE adj (%) -30.0 -27.4 -21.8
Dividend yield (%) 0 0 0
FCF yield (%) -4.9 -11.9 -8.6
Lease adj. FCF yld (%) -4.9 -11.9 -8.6
Net IB debt/EBITDA -4.4 -112.8 13.6
Lease adj. ND/EBITDA -4.4 -112.9 13.6
15 November 2019 ABG Sundal Collier 2 Geographical breakdown, sales, SEKm
Source: ABG Sundal Collier, Company data
No. of employees
Source: ABG Sundal Collier, Company data
EPS estimate changes, 2019e, SEK
Source: ABG Sundal Collier, FactSet
EPS estimate changes, 2020e, SEK
Source: ABG Sundal Collier, FactSet
Quarterly sales and adj. EBIT, SEKm
Source: ABG Sundal Collier, Company data
Opportunities
Motion Display has recently taken the step from being a developing company to a fully commercialising company.
Its unique technology has started to gain ground and sales have increased. This has resulted in several well- known reference customers, which can be used as the company attempts to take share in the enormous advertising business. The company currently generates most of its revenues from the US, but there is an opportunity to expand its offering to other markets in the future.
Risks
The main risks for Motion Display are: 1) It is a small company with limited resources, which can sometimes make it hard to gain ground at bigger enterprises. In addition, there is a risk of competition from larger players. 2) Volatile sales as the timing of individual larger orders can be irregular, which often has a big impact on sales q-o-q. 3) Due to its size, Motion Display is highly dependent on a small number of people.
0 5 10 15 20 25 30 35 40 45 50
Sweden Europe USA Other
Sales
0 2 4 6 8 10 12 14
2014 2015 2016 2017
Sales
-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2
ABGSC FactSet Consensus Mean
-0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
ABGSC FactSet Consensus Mean
-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0
0 2 4 6 8 10 12 14 16 18
quarterly sales quarterly adj. EBIT
Company description
Motion Display operates in the fast-growing In-Store
Marketing segment. This means marketing of a specific
product inside a store, which is done either by the
producer of the product, or by the store itself. The
company offers its unique self-developed signs, which,
through a flashing finesse, enhance the exposure of the
products and thus makes them stand out. The displays
are based on an extensive patent from electronic paper
and the self-developed software. Motion Display’s biggest
share of sales is generated from the US (85% 2017). The
company has a well-known customer base, with clients
such as Adidas, Bacardi and Scan.
15 November 2019 ABG Sundal Collier 3
Deviation table and estimate revisions
Q3 sales amounted to SEK 12.6m, which was 6% (or SEK 0.8m) above ABGSCe.
Compared with Q3’18, this corresponded to 23% y-o-y growth, and was largely driven by a strong order intake in Q2’18. In terms of earnings, MODI reported EBIT of SEK 0.4m, for an EBIT margin of 3.4%. Our forecasted EBIT was SEK 1.2m. The deviation stemmed from a lower gross margin combined with higher opex (relating to ‘other external costs’).
Deviation table
Source: ABG Sundal Collier, company data
ABGSCe
SEKm Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'19e % #
Total sales 10.0 11.0 7.5 6.0 12.6 11.9 6% 0.8
COGS -4.7 -5.4 -3.6 -2.5 -6.7 -5.7 17% -1.0
Gross result 4.3 4.9 2.5 3.1 4.5 5.3 -15% -0.8
Opex -3.7 -4.5 -4.7 -4.9 -4.8 -4.2 15% -0.6
EBITDA 1.6 1.1 -0.8 -1.3 1.2 2.0 -41% -0.8
Deprec.&Amort. -0.8 -0.8 -0.7 -0.7 -0.7 -0.8 -1% 0.0
EBIT adj. 0.9 0.4 -1.6 -2.0 0.4 1.2 -65% -0.8
Net financials 0.0 -0.1 -0.1 -0.1 -0.1 -0.1 -31% 0.0
EBT 0.8 0.3 -1.6 -2.1 0.4 1.2 -67% -0.8
Tax 0.0 0.0 0.0 0.0 0.0 0.0 na 0.0
Net income 0.8 0.3 -1.6 -2.1 0.4 1.2 -67% -0.8
Growth metrics Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'19 % #
Sales growth y-o-y 8% 13% -63% -62% 23% 21% 10% 0.0
EBITDA growth y-o-y 82% 1242% -122% -126% -27% 23% -218% -0.5
EBIT growth y-o-y 406% -158% -151% -148% -50% 43% -215% -0.9
Margins Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'19 % #
Gross margin 48% 47% 41% 55% 40% 48% -16% -0.1
EBITDA margin 16% 10% -11% -22% 9% 17% -45% -0.1
Adj. EBIT margin 9% 3% -21% -34% 3% 10% -67% -0.1
Deviation
15 November 2019 ABG Sundal Collier 4 Estimate changes:
We reduce 2019e-2021e sales by 10-12%, due to Q3’s relatively soft order intake.
We have lowered the corresponding gross margins from 46-47% to 43- 44%, due to the US tariffs.
We have slightly increased our opex assumptions, which mostly reflects higher ‘other external costs’.
In total, these revisions result in SEK 3-5m cuts to our ’19e-’21e EBIT.
Estimate changes
Source: ABG Sundal Collier, company data
Old forecast New forecast Change Change
P/L, SEKm 2019 2020e 2021e 2019 2020e 2021e 2019 2020e 2021e 2019 2020e 2021e
Sales 36 46 51 32 41 46 -12% -12% -10% -4.2 -5.4 -5.1
Other income 4 4 4 5 4 4 24% 8% 2% 0.9 0.3 0.1
COGS 54 68 74 46 59 66 -14% -13% -12% -7.4 -9.1 -8.6
Gross result 17 21 23 14 18 20 -19% -17% -15% -3.2 -3.7 -3.5
Gross margin 47% 46% 46% 44% 43% 43% -4% -3% -3%
Other external costs -9 -10 -10 -10 -11 -11 10% 10% 10% -0.9 -0.9 -1.0
Personnel costs -9 -11 -12 -10 -11 -12 2% 2% 2% -0.1 -0.2 -0.2
D&A -3 -3 -3 -3 -3 -3 0% 0% 0% 0.0 0.0 0.0
EBIT -1 1 2 -4 -3 -3 nmf nmf nmf -3.4 -4.6 -4.6
EBIT margin -2% 3% 4% -13% -8% -6%
Net financials 0 0 0 0 0 0 -18% -18% -18% 0.1 0.1 0.1
EBT -1 1 2 -4 -3 -3 nmf nmf nmf -3.3 -4.5 -4.5
Tax 0 0 0 0 0 0 nmf nmf nmf 0.0 0.0 0.0
Net income -1 1 2 -4 -3 -3 nmf nmf nmf -3.3 -4.5 -4.5
15 November 2019 ABG Sundal Collier 5 Q3’19 earnings composition
Source: ABG Sundal Collier, company data
Q3’19 EBIT bridge
Source: ABG Sundal Collier, company data
Net sales & order book
Source: ABG Sundal Collier, company data
Sales & EBIT, yearly
Source: ABG Sundal Collier, company data
Sales growth, y-o-y
Source: ABG Sundal Collier, company data
Sales & EBIT margin, quarterly
Source: ABG Sundal Collier, company data
11.2
0.4 1.5
-6.7
-4.8
-0.7
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Q3 net sales Other revenues COGS OPEX D&A EBIT Q3'19
0.9
0.4 2.1
0.5
0.0
-1.9
-1.1
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
EBIT Q3'18 Sales COGS Other revenues
OPEX D&A EBIT Q3'19
0 2 4 6 8 10 12 14
0 2 4 6 8 10 12 14 16 18
Diff sales vs orderbook Net Sales Order book Average
-15 -10 -5 0 5 10
0 10 20 30 40 50 60
2014 2015 2016 2017 2018 2019e 2020e 2021e
Sales EBIT
-100%
-50%
0%
50%
100%
150%
200%
250%
-160%
-140%
-120%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
0 2 4 6 8 10 12 14 16 18
Sales EBIT margin
15 November 2019 ABG Sundal Collier 6
Motion Display in brief
Motion Display (MODI,) headquartered in Uppsala, Sweden, produces and commercialises unique self-developed digital signs for the fast-growing In-store Marketing area, allowing a shop or the producer of a product to enhance the visibility of specific items. Today’s focus is primarily on retail stores and marketing, but MODI is open to broadening its offering into other segments as well.
The company has grown rapidly in recent years. Its patented products, (blinking signs made of electronic paper from E-Ink Corporation,) are sold globally. The displays show moving messages that draw attention to a specific product, aiming to increase its sales. The signs consume very little power ̶ they are driven by small batteries that generally last for ~5-7 months. This, combined with other
characteristics which are similar to paper, means that the displays are just as easy to handle as traditional paper signs with static messages. The most recent software launch (in 2015) allowed for the possibility of showing different messages and price information depending on what day or time it is. The update also made it possible to activate a “sleeping-mode,” which can almost double battery life.
MODI’s product portfolio currently is composed of four different types of adjustable e-paper signs and additional “add-ons”:
Fixed overlay – signs with personal messages, primarily positioned within a store.
Covers – Mainly placed in front of a book or game-cover.
ESL (Electronical Shelf Labels) add-ons ̶ mainly installed next to price labels within a store.
Blinking price displays – a substitute for traditional price labels.
Since its first product launch in 2013, MODI has been able to sell its products to various well-known customers in numerous countries. The first products were shipped to ICA in Sweden and Coca-Cola in Norway, establishing important contacts with reputable actors. In 2014, the company established itself in the US, starting off with two deliveries, including installations, to Walmart. The US has since grown into an important market for MODI, accounting for ~92% of 2018 revenues.
Other well-known customers include Adidas, Bacardi, Electrolux and Scan. One advantage of having such a reputable customer base is that it conveys a ‘seal of approval’ to MODI’s products.
A growing market – driven by digitalisation and need for differentiation
According to studies from Popai, about 70-80% of all purchasing decisions take place within the store, in front of the specific product. The first 4-7 seconds represent a crucial moment. Hence, it is essential to have an offering that is attractive enough for the customer to choose to buy during that moment. Equally important is that intense competition challenges the producer to have a product that is exposed enough for the moment to occur.
In conjunction with the demand for differentiation, merchants must invest in their stores to remain competitive against the increasing amount of e-commerce retailers.
Consequently, digitalisation constitutes another driver for in-store marketing. This has resulted in a large, fast-growing market, which is currently worth more than USD 430m annually – in the US alone.
ESL Add-on
Source: Motion Display
Operates in the rapidly growing In- store Marketing segment
Displays that enhance the attention to specific products
The US constitutes as an important
market (~92% of 2018’s revenues)
15 November 2019 ABG Sundal Collier 7 Interim breakdown of forecasts
Source: ABG Sundal Collier, company data
P/L, SEKm Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19e 2016 2017 2018 2019e 2020e 2021e
Net sales 16.3 14.7 9.1 10.3 6.1 5.6 11.2 9.2 31.3 29.4 50.4 32.1 41.1 46.0
COGS -9.1 -6.8 -4.7 -5.4 -3.6 -2.5 -6.7 -5.3 -16.4 -16.2 -26.1 -18.1 -23.4 -26.2
Gross result 7.2 7.8 4.3 4.9 2.5 3.1 4.5 4.0 14.9 13.3 24.3 14.0 17.7 19.8
Other revenues 0.7 1.2 1.0 0.7 1.4 0.5 1.5 1.2 2.4 2.2 3.6 4.5 4.2 4.2
OPEX -4.1 -4.0 -3.7 -4.5 -4.7 -4.9 -4.8 -5.3 -14.1 -15.1 -16.3 -19.7 -21.9 -23.4 Non-recurring items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBITDA 3.8 5.0 1.6 1.1 -0.8 -1.3 1.2 -0.2 3.2 0.4 11.6 -1.1 -0.1 0.6
D&A -0.7 -0.7 -0.8 -0.8 -0.7 -0.7 -0.7 -0.7 -2.8 -2.8 -3.0 -3.0 -3.1 -3.1
EBIT 3.1 4.3 0.9 0.4 -1.6 -2.0 0.4 -0.9 0.3 -2.5 8.6 -4.1 -3.1 -2.5
Net financials -0.1 -0.1 0.0 -0.1 -0.1 -0.1 -0.1 0.0 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3
EBT 3.0 4.2 0.8 0.3 -1.6 -2.1 0.4 -1.0 0.1 -2.7 8.4 -4.3 -3.4 -2.9
Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net incom e 3.0 4.2 0.8 0.3 -1.6 -2.1 0.4 -1.0 0.1 -2.7 8.4 -4.3 -3.4 -2.9
EPS basic (SEK) 0.29 0.41 0.08 0.03 -0.16 -0.20 0.04 -0.09 0.01 -0.26 0.81 -0.42 -0.33 -0.27
Grow th m etrics
Sales grow th q-o-q 78% -10% -38% 14% -41% -9% 101% -17% N/A N/A N/A N/A N/A N/A Sales grow th y-o-y 209% 121% 8% 13% -63% -62% 23% -11% 174% -6% 71% -36% 28% 12%
EBITDA grow th y-o-y nfm nfm 82% nfm nfm nfm -27% nfm nfm -88% nfm nfm -95% nfm EBIT grow th y-o-y nfm nfm 406% nfm nfm nfm -50% nfm nfm nfm nfm nfm -24% -18%
Margins
Gross margin 44% 54% 48% 47% 41% 55% 40% 43% 48% 45% 48% 44% 43% 43%
Adj. EBITDA margin 22% 32% 16% 10% -11% -22% 9% -2% 9% 1% 21% -3% 0% 1%
Adj. EBIT margin 18% 27% 9% 3% -21% -34% 3% -9% 1% -8% 16% -11% -7% -5%
FCF & cash position
FCF 0.7 0.0 -2.1 -0.4 3.5 -1.9 -4.0 -0.1 -0.1 -2.7 -1.8 -2.5 -5.9 -4.3
Cash 1.4 1.8 1.6 0.1 3.6 3.2 0.1 3.0 3.3 1.2 0.1 3.0 1.1 0.3
15 November 2019 ABG Sundal Collier 8
Source: ABG Sundal Collier, Company data
Income Statement (SEKm) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019e
Sales 16 15 9 10 6 6 11 9
COGS -9 -7 -5 -5 -4 -2 -7 -5
Gross profit 7 8 4 5 2 3 5 4
Other operating items -3 -3 -3 -4 -3 -4 -3 -4
EBITDA 4 5 2 1 -1 -1 1 -0
Depreciation and amortisation -1 -1 -1 -1 -1 -1 -1 -1
EBITA 3 4 1 0 -2 -2 0 -1
EO items 0 0 0 0 0 0 0 0
Impairment and PPA amortisation 0 0 0 0 0 0 0 0
EBIT 3 4 1 0 -2 -2 0 -1
Net financial items -0 -0 -0 -0 -0 -0 -0 -0
Pretax profit 3 4 1 0 -2 -2 0 -1
Tax 0 0 0 0 0 0 0 0
Net profit 3 4 1 0 -2 -2 0 -1
Minority interest 0 0 0 0 0 0 0 0
Net profit discontinued 0 0 0 0 0 0 0 0
Net profit to shareholders 3 4 1 0 -2 -2 0 -1
EPS 0.29 0.41 0.08 0.03 -0.16 -0.20 0.04 -0.09
EPS Adj 0.29 0.41 0.08 0.03 -0.16 -0.20 0.04 -0.09
Total extraordinary items after tax 0 0 0 0 0 0 0 0
Tax rate (%) 0 0 0 0 0 0 0 0
Gross margin (%) 44.3 53.5 47.7 47.3 40.7 55.0 40.3 43.0
EBITDA margin (%) 23.4 34.3 17.9 10.9 -13.4 -23.5 10.5 -1.8
EBITA margin (%) 19.0 29.2 9.6 3.5 -25.6 -36.9 3.9 -9.8
EBIT margin (%) 19.0 29.2 9.6 3.5 -25.6 -36.9 3.9 -9.8
Pretax margin (%) 18.5 28.9 9.1 2.9 -26.8 -37.9 3.4 -10.4
Net margin (%) 18.5 28.9 9.1 2.9 -26.8 -37.9 3.4 -10.4
Growth rates Y/Y Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019e
Sales growth (%) 209.2 121.4 8.2 12.7 -62.5 -62.2 23.3 -10.5
EBITDA growth (%) +chg +chg 82.4 1,241.7 -chg -chg -27.3 -chg
EBIT growth (%) +chg +chg 406.4 +chg -chg -chg -49.8 -chg
Net profit growth (%) +chg +chg 581.0 +chg -chg -chg -53.5 -chg
EPS growth (%) +chg +chg 581.0 +chg -chg -chg -53.5 -chg
Adj earnings numbers Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019e
EBITDA Adj 4 5 2 1 -1 -1 1 -0
EBITDA Adj margin (%) 23.4 34.3 17.9 10.9 -13.4 -23.5 10.5 -1.8
EBITA Adj 3 4 1 0 -2 -2 0 -1
EBITA Adj margin (%) 19.0 29.2 9.6 3.5 -25.6 -36.9 3.9 -9.8
EBIT Adj 3 4 1 0 -2 -2 0 -1
EBIT Adj margin (%) 19.0 29.2 9.6 3.5 -25.6 -36.9 3.9 -9.8
Pretax profit Adj 3 4 1 0 -2 -2 0 -1
Net profit Adj 3 4 1 0 -2 -2 0 -1
Net profit to shareholders Adj 3 4 1 0 -2 -2 0 -1
Net Adj margin (%) 18.5 28.9 9.1 2.9 -26.8 -37.9 3.4 -10.4
15 November 2019 ABG Sundal Collier 9
Source: ABG Sundal Collier, Company data
Income Statement (SEKm) 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Sales 8 6 7 11 31 29 50 32 41 46
COGS 0 0 0 0 0 0 0 0 0 0
Gross profit 8 6 7 11 31 29 50 32 41 46
Other operating items -21 -17 -18 -18 -28 -29 -39 -33 -41 -45
EBITDA -13 -11 -10 -7 3 0 12 -1 -0 1
Depreciation and amortisation -1 -2 -2 -3 -3 -3 -3 -3 -3 -3
Of which leasing depreciation 0 0 0 0 0 0 0 0 0 0
EBITA -14 -12 -12 -10 0 -2 9 -4 -3 -3
EO items 0 0 0 0 0 0 0 0 0 0
Impairment and PPA amortisation 0 0 0 0 0 0 0 0 0 0
EBIT -14 -12 -12 -10 0 -2 9 -4 -3 -3
Net financial items -1 -0 -0 -0 -0 -0 -0 -0 -0 -0
Pretax profit -14 -13 -13 -10 0 -3 8 -4 -3 -3
Tax 0 0 0 0 0 0 0 0 0 0
Net profit -14 -13 -13 -10 0 -3 8 -4 -3 -3
Minority interest 0 0 0 0 0 0 0 0 0 0
Net profit discontinued 0 0 0 0 0 0 0 0 0 0
Net profit to shareholders -14 -13 -13 -10 0 -3 8 -4 -3 -3
EPS -2.55 -2.25 -1.46 -1.05 0.01 -0.26 0.81 -0.42 -0.33 -0.27
EPS Adj -2.55 -2.25 -1.46 -1.05 0.01 -0.26 0.81 -0.42 -0.33 -0.27
Total extraordinary items after tax 0 0 0 0 0 0 0 0 0 0
Leasing payments 0 0 0 0 0 0 0 0 0 0
Tax rate (%) 0 0 0 0 0 0 0 0 0 0
Gross margin (%) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
EBITDA margin (%) -157.3 -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.5 -0.1 1.2
EBITA margin (%) -170.5 -193.7 -168.1 -84.8 1.1 -8.4 17.1 -12.7 -7.6 -5.5
EBIT margin (%) -170.5 -193.7 -168.1 -84.8 1.1 -8.4 17.1 -12.7 -7.6 -5.5
Pretax margin (%) -178.8 -200.4 -170.6 -86.7 0.3 -9.2 16.6 -13.5 -8.3 -6.2
Net margin (%) -178.8 -200.4 -170.6 -86.7 0.3 -9.2 16.6 -13.5 -8.3 -6.2
Growth rates Y/Y 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Sales growth (%) na -21.2 17.5 54.0 174.4 -5.9 71.1 -36.3 28.0 12.0
EBITDA growth (%) na 16.1 1.5 33.3 145.6 -88.5 3,084.6 -109.6 94.5 1,026.3
EBIT growth (%) na 10.6 -2.0 22.3 103.5 -828.4 447.1 -147.4 23.9 18.4
Net profit growth (%) na 11.7 0 21.7 101.0 -2,757.8 409.1 -151.5 20.6 16.7
EPS growth (%) na 11.7 35.0 27.9 100.9 -2,757.8 409.1 -151.5 20.6 16.7
Profitability 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
ROE (%) na -394.1 -159.3 -74.8 0.9 -28.5 67.9 -30.0 -27.4 -21.8
ROE Adj (%) na -394.1 -159.3 -74.8 0.9 -28.5 67.9 -30.0 -27.4 -21.8
ROCE (%) na -229.3 -134.4 -63.2 2.5 -20.7 56.6 -20.3 -15.2 -12.1
ROCE Adj(%) na -229.3 -134.4 -63.2 2.5 -20.7 56.6 -20.3 -15.2 -12.1
ROIC (%) na -385.4 -154.2 -73.2 3.0 -25.4 59.2 -22.0 -16.9 -12.5
ROIC Adj (%) na -385.4 -154.2 -73.2 3.0 -25.4 59.2 -22.0 -16.9 -12.5
Adj earnings numbers 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
EBITDA Adj -13 -11 -10 -7 3 0 12 -1 -0 1
EBITDA Adj margin (%) -157.3 -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.5 -0.1 1.2
EBITDA lease Adj -13 -11 -10 -7 3 0 12 -1 -0 1
EBITDA lease Adj margin (%) -157.3 -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.5 -0.1 1.2
EBITA Adj -14 -12 -12 -10 0 -2 9 -4 -3 -3
EBITA Adj margin (%) -170.5 -193.7 -168.1 -84.8 1.1 -8.4 17.1 -12.7 -7.6 -5.5
EBIT Adj -14 -12 -12 -10 0 -2 9 -4 -3 -3
EBIT Adj margin (%) -170.5 -193.7 -168.1 -84.8 1.1 -8.4 17.1 -12.7 -7.6 -5.5
Pretax profit Adj -14 -13 -13 -10 0 -3 8 -4 -3 -3
Net profit Adj -14 -13 -13 -10 0 -3 8 -4 -3 -3
Net profit to shareholders Adj -14 -13 -13 -10 0 -3 8 -4 -3 -3
Net Adj margin (%) -178.8 -200.4 -170.6 -86.7 0.3 -9.2 16.6 -13.5 -8.3 -6.2
15 November 2019 ABG Sundal Collier 10
Source: ABG Sundal Collier, Company data
Cash Flow Statement (SEKm) 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
EBITDA -13 -11 -10 -7 3 0 12 -1 -0 1
Net financial items -1 -0 -0 -0 -0 -0 -0 -0 -0 -0
Paid tax 0 0 0 0 0 0 0 0 0 0
Non-cash items 0 0 -0 0 0 0 -0 0 0 0
Cash flow before change in WC -13 -11 -11 -7 3 0 11 -1 -0 0
Change in WC na 4 -11 2 1 1 -10 4 -2 -1
Operating cash flow -22 -7 -16 -5 2 0 2 1 -2 -0
CAPEX tangible fixed assets 0 0 0 0 0 0 0 0 0 0
CAPEX intangible fixed assets -2 -3 -3 -3 -2 -3 -3 -4 -4 -4
Acquisitions and disposals 0 0 0 0 0 0 0 0 0 0
Free cash flow -24 -10 -20 -8 -0 -3 -2 -2 -6 -4
Dividend paid 0 0 0 0 0 0 0 0 0 0
Share issues and buybacks 0 0 0 0 0 0 0 0 0 0
Other non cash items 26 7 23 5 2 1 -1 1 4 4
Decrease in net IB debt na -4 3 -3 2 -2 -2 -2 -2 -1
Balance Sheet (SEKm) 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Goodwill 0 0 0 0 0 0 0 0 0 0
Other intangible assets 5 7 8 9 8 8 8 9 10 11
Tangible fixed assets 0 0 0 0 0 1 1 1 1 1
Right-of-use asset 0 0 0 0 0 0 0 0 0 0
Total other fixed assets 0 0 0 0 0 0 0 0 0 0
Fixed assets 6 7 9 9 8 8 9 10 11 11
Inventories 2 3 7 6 4 8 12 9 10 11
Receivables 2 1 2 4 10 8 13 10 11 12
Other current assets 0 0 0 0 0 0 0 0 0 0
Cash and liquid assets 4 0 2 2 3 1 0 3 1 0
Total assets 14 11 21 20 25 26 34 32 33 36
Shareholders equity 6 0 16 11 11 8 17 12 13 13
Minority 0 0 0 0 0 0 0 0 0 0
Total equity 6 0 16 11 11 8 17 12 13 13
Long-term debt 2 2 1 3 3 2 4 8 8 8
Pension debt 0 0 0 0 0 0 0 0 0 0
Convertible debt 0 0 0 0 0 0 0 0 0 0
Leasing liability 0 0 0 0 0 0 0 0 0 0
Total other long-term liabilities 0 0 0 0 0 0 0 0 0 0
Short-term debt 0 0 0 0 0 0 0 0 0 0
Accounts payable 6 9 4 6 11 15 14 12 12 14
Other current liabilities 0 0 -0 0 0 -0 0 0 0 0
Total liabilities and equity 14 11 21 20 25 26 34 32 33 36
Net IB debt -2 2 -1 1 -1 1 3 5 7 8
Net IB debt excl. pension debt -2 2 -1 1 -1 1 3 5 7 8
Net IB debt excl. leasing -2 2 -1 1 -1 1 3 5 7 8
Capital invested 4 2 14 12 10 9 20 17 20 21
Working capital -1 -5 6 3 2 1 11 7 9 10
EV breakdown 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Market cap. diluted (m) na na 43 42 72 85 101 50 50 50
Net IB debt Adj -2 2 -1 1 -1 1 3 5 7 8
Market value of minority 0 0 0 0 0 0 0 0 0 0
Reversal of shares and participations 0 0 0 0 0 0 0 0 0 0
Reversal of conv. debt assumed equity 0 0 0 0 0 0 0 0 0 0
EV na na 42 43 71 86 104 55 57 58
Capital efficiency 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Total assets turnover (%) na 49.1 46.3 56.1 139.7 116.9 168.9 97.0 125.9 133.9
Working capital/sales (%) na -49.6 4.0 39.0 8.5 4.9 11.8 28.9 20.0 20.3
Financial risk and debt service 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Net debt/equity -0.30 8.62 -0.10 0.14 -0.05 0.13 0.21 0.40 0.54 0.57
Net debt/market cap na na -0.02 0.04 -0.01 0.01 0.03 0.10 0.14 0.15
Equity ratio (%) 43.6 1.8 76.2 53.5 44.0 31.7 48.7 38.0 38.7 37.7
Net IB debt adj./equity -0.30 8.63 -0.10 0.14 -0.05 0.13 0.21 0.40 0.54 0.57
Current ratio 1.56 0.46 2.99 1.85 1.48 1.13 1.80 1.87 1.82 1.70
EBITDA/net interest -19.14 -24.85 -57.49 -32.43 13.23 1.60 48.30 -4.82 -0.19 1.77
Net IB debt/EBITDA 0.15 -0.17 0.14 -0.21 -0.16 2.81 0.29 -4.43 -112.79 13.58
Net IB debt/EBITDA lease Adj 0.15 -0.17 0.14 -0.21 -0.16 2.83 0.30 -4.44 -112.90 13.59
Interest cover -20.76 -28.73 -68.80 -45.20 1.43 -10.94 35.92 -17.73 -9.80 -7.99
15 November 2019 ABG Sundal Collier 11
Source: ABG Sundal Collier, Company data
Valuation and Ratios (SEKm) 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Shares outstanding adj. 6 6 9 10 10 10 10 10 10 10
Fully diluted shares Adj 6 6 9 10 10 10 10 10 10 10
EPS -2.55 -2.25 -1.46 -1.05 0.01 -0.26 0.81 -0.42 -0.33 -0.27
Dividend per share Adj 0 0 0 0 0 0 0 0 0 0
EPS Adj -2.55 -2.25 -1.46 -1.05 0.01 -0.26 0.81 -0.42 -0.33 -0.27
BVPS 1.11 0.04 1.73 1.04 1.05 0.78 1.59 1.18 1.23 1.29
BVPS Adj 0.20 -1.16 0.85 0.22 0.29 0.03 0.83 0.32 0.29 0.28
Net IB debt / share -0.3 0.3 -0.2 0.1 -0.0 0.1 0.3 0.5 0.7 0.7
Share price na na 4.78 4.00 6.90 8.15 9.68 4.80 4.80 4.80
Market cap. (m) na na 43 42 72 85 101 50 50 50
Valuation 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
P/E na na -3.3 -3.8 703.2 -31.3 12.0 -11.6 -14.6 -17.5
EV/sales na na 5.63 3.78 2.28 2.91 2.06 1.71 1.38 1.25
EV/EBITDA na na -4.0 -6.2 22.5 235.6 9.0 -49.3 -934.6 102.3
EV/EBITA na na -3.3 -4.5 208.9 -34.5 12.1 -13.4 -18.2 -22.7
EV/EBIT na na -3.3 -4.5 208.9 -34.5 12.1 -13.4 -18.2 -22.7
Dividend yield (%) na na 0 0 0 0 0 0 0 0
FCF yield (%) na na -48.3 -21.3 -0.1 -3.2 -1.8 -4.9 -11.9 -8.6
Lease adj. FCF yield (%) na na -48.3 -21.3 -0.1 -3.2 -1.8 -4.9 -11.9 -8.6
P/BVPS na na 2.76 3.86 6.60 10.39 6.08 4.08 3.90 3.71
P/BVPS Adj na na 5.65 18.60 23.76 236.00 11.60 15.03 16.41 17.35
P/E Adj na na -3.3 -3.8 703.2 -31.3 12.0 -11.6 -14.6 -17.5
EV/EBITDA Adj na na -4.0 -6.2 22.5 235.6 9.0 -49.3 -934.6 102.3
EV/EBITA Adj na na -3.3 -4.5 208.9 -34.5 12.1 -13.4 -18.2 -22.7
EV/EBIT Adj na na -3.3 -4.5 208.9 -34.5 12.1 -13.4 -18.2 -22.7
EV/cap. employed na na 2.5 3.1 5.2 8.2 5.2 2.7 2.7 2.7
Investment ratios 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e
Capex/sales 30.3 50.6 47.1 28.5 6.7 9.9 6.8 12.2 9.5 8.5
Capex/depreciation 228.3 193.7 170.2 118.9 74.5 102.8 115.3 131.1 127.9 126.1
Capex tangibles/tangible fixed assets 0 0 0 0 0 0 0 0 0 0
Capex intangibles/definite intangibles 47.5 47.4 43.5 38.1 26.8 37.5 43.6 43.9 40.0 37.0
Depreciation on intangibles/definite intangibles 20.8 24.5 25.6 32.0 35.9 36.5 37.8 33.5 31.3 29.4
Depreciation on tangibles/tangibles 0 0 0 0 0 0 0 0 0 0
15 November 2019 ABG Sundal Collier 12 Analyst certification
I/We, Simon Granath, the author(s) of this report, certify that not withstanding the existence of any such potential conflicts of interests referred to below, the views expressed in this report accurately reflect my/our personal view about the companies and securities covered in this rep ort.
Analyst valuation methods
ABG Sundal Collier analysts may publish valuation ranges for stocks covered under Company Sponsored Research. These valuation ranges rely on various valuation methods. One of the most frequently used methods is the valuation of a company by calculation of th at company's discounted cash flow (DCF). Another valuation method is the analysis of a company's return on capital employed relative to its cost of capital.
Finally, the analysts may analyse various valuation multiples (e.g. the P/E multiples and the EV/EBITDA multiples) relative t o global industry peers. In special cases, particularly for property companies and investment companies, the ratio of price to net asset value is considered.
Valuation ranges may be changed when earnings and cash flow forecasts are changed. They may also be changed when the underlyi ng value of a company's assets changes (in the cases of investment companies, property companies or insurance companies) or when factors impacting the required rate of return change.
Important Company Specific Disclosure
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The following disclosures relate to the relationship between ABG Sundal Collier and its affiliates and the companies covered by ABG Sundal Collier referred to in this research report.
Unless disclosed in this section, ABG Sundal Collier has no required regulatory disclosures to make in relation to an ownersh ip position for the analyst(s) and members of the analyst's household, ownership by ABG Sundal Collier, ownership in ABG Sundal Col lier by the company(ies) to whom the report(s) refer(s) to, market making, managed or co-managed public offerings, compensation for provision of certain services, directorship of the analyst, or a member of the analyst's household, or in relation to any contractual obligations to the issuance of this research report.
ABG Sundal Collier has undertaken a contractual obligation to issue this report and receives predetermined compensation from the company covered in this report.
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ABG Sundal Collier is engaged in providing liquidity in Motion Display Scand.’s securities at the time of this report’s publication.
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