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
Better than expected, improved outlook for H2
Q2 sales were better than feared
Solid start to Q3 bodes well for improved sales q-o-q
We raise ‘20e sales by 23%
Sales +3% y-o-y on easy comps (+13% vs. ABGSCe)
Similar to Q1, COVID-19 took a heavy toll on Motion Display (MODI) in Q2. Sales were SEK 5.7m vs. ABGSCe at SEK 5.0m, corresponding to y-o-y growth of +3% (although against easy comps). The gross margin was strong at 56%, driven by a good sales mix. Furthermore, opex declined 33% q-o-q, stemming from good costs control as well as from governmental subsidies (which amounted to SEK 0.66m in Q2).
Encouraging outlook for Q3
Despite the tough H1’20, we note that MODI ended Q2 with an order book of SEK 4.9m. We think that this, together with its Q2 report wording, which stated that it has already received orders of SEK 4m in Q3, bodes well for sequential improvements in the coming quarter. We raise our 2020e sales forecast by 23% due to the Q2 sales beat and the positive words regarding Q3. We now forecast Q3 sales of SEK 7.6m, up from SEK 3.1m. In terms of Q3 EBIT, we see a figure of SEK 0.2m, driven by the higher sales and our assessment that costs should remain
suppressed.
3% ’19-‘22e sales CAGR, 1.0x ‘21e EV/sales
MODI has recently launched some new products, which we think could give some tailwinds to its financials in the coming quarters. On our new estimates, we see a ’19-‘22e sales CAGR of 3%. While we estimate positive cash flows in H2’20e, cash at the end of Q2 was only SEK 0.2m, which we think suggests that further capital injections might be required in order to create a liquidity buffer. Its share is currently trading at 1.0x
‘21e EV/sales.
20/08/2020
Performance Equity Research - 20 August 2020 18:58 CET
SEKm 2018 2019 2020e 2021e 2022e
Sales 50 30 25 31 34
EBITDA 12 -1 -1 -0 -0
EBITDA margin (%) 23.0 -3.9 -2.7 -0.8 -0.8
EBIT adj 9 -4 -4 -3 -3
EBIT adj margin (%) 17.1 -13.7 -15.2 -11.2 -9.7
Pretax profit 8 -4 -4 -4 -4
EPS rep 0.81 -0.42 -0.40 -0.23 -0.23
EPS adj 0.81 -0.42 -0.40 -0.23 -0.23
Sales growth (%) 71.1 -40.2 -16.2 21.0 12.0
EPS growth (%) 409.1 -152.3 5.4 42.2 0.1
Source: ABG Sundal Collier, Company data Lead analyst: Simon Granath
Estimate changes (%)
2020e 2021e 2022e
Sales 23.3% 2.9% 0.2%
EBIT (rep) 49.7% 28.2% 18.8%
EPS (rep) 48.0% 27.6% 18.8%
Source: ABG Sundal Collier
Share price (SEK) 1.8
IT, Sweden MODI.TE/MODI SS
MCap (SEKm) 19
MCap (EURm) 1.8
Net debt (EURm) 1
No. of shares (m) 10.4
Free float (%) 67.0
Av. daily volume (k) 0.1
Next event Q3 report: 12 Nov
0 20 40 60 80 100 120 140 160 180
Au g 1 7 O ct 1 7 D e c 1 7 F e b 1 8 Ap r 1 8 Ju n 1 8 Au g 1 8 O ct 1 8 D e c 1 8 F e b 1 9 Ap r 1 9 Ju n 1 9 Au g 1 9 O ct 1 9 D e c 1 9 F e b 2 0 Ap r 2 0 Ju n 2 0
Motion Display Scand. OMX STH PI
1m 3m 12m
Absolute (%) 5.9 -2.2 -66.7
OMX STH PI (%) 1.6 15.9 18.2
Source: FactSet
2020e 2021e 2022e
P/E (x) -4.5 -7.8 -7.8
P/E adj (x) -4.5 -7.8 -7.8
P/BVPS (x) 2.34 2.18 3.03
EV/EBITDA (x) -35.9 -137.2 -133.3
EV/EBIT adj (x) -6.3 -9.3 -11.1
EV/sales (x) 0.96 1.04 1.08
ROE adj (%) -41.1 -35.6 -32.4
Dividend yield (%) 0 0 0
FCF yield (%) -7.6 -17.8 -16.4
Lease adj. FCF yld (%) -7.6 -17.8 -16.4
Net IB debt/EBITDA -8.2 -4.5 -22.0
Lease adj. ND/EBITDA -8.3 -4.5 -22.1
20 August 2020 ABG Sundal Collier 2 Geographical breakdown, sales, SEKm
Source: ABG Sundal Collier, Company data
Business area breakdown, sales, SEKm
Source: ABG Sundal Collier, Company data
EPS estimate changes, 2020e, SEK
Source: ABG Sundal Collier, FactSet
EPS estimate changes, 2021e, 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 16
2016 2017 2018 2019
Sales
-0.8 -0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2
ABGSC FactSet Consensus Mean
-0.5 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2
ABGSC FactSet Consensus Mean
-4.0 -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.
20 August 2020 ABG Sundal Collier 3
Deviation table and estimate revisions
Q2 sales were SEK 5.7m, or 13% (SEK 0.7m) above ABGSCe. Compared with Q2’19, this is +3% y-o-y growth, although it should be noted that MODI was facing easy comps. In terms of EBIT, MODI reported a figure of SEK -0.6m, which was above our forecast of SEK -2.1m, explained by the sales beat and lower costs.
Deviation table
Source: ABG Sundal Collier, company data
ABGSCe
SEKm Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'20e % #
Net sales 5.6 11.2 7.3 3.0 5.7 5.0 13% 0.7
Other income 0.5 1.5 0.6 1.0 0.2 0.7 -67% -0.5
Total income 6.0 12.6 7.9 3.9 5.9 5.7 3% 0.2
COGS -2.5 -6.7 -3.2 -1.7 -2.5 -2.8 -10% 0.3
Gross result 3.1 4.5 4.1 1.3 3.2 2.2 43% 1.0
Opex -4.9 -4.8 -5.0 -4.8 -3.2 -4.2 -24% 1.0
EBITDA -1.3 1.2 -0.2 -2.5 0.2 -1.3 -116% 1.5
Deprec.&Amort. -0.7 -0.7 -0.7 -0.8 -0.8 -0.8 -3% 0.0
EBIT -2.0 0.4 -0.9 -3.3 -0.6 -2.1 -72% 1.5
Net financials -0.1 -0.1 -0.1 -0.1 0.0 -0.1 -55% 0.1
Pre-tax profit -2.1 0.4 -1.0 -3.4 -0.6 -2.2 -72% 1.6
Tax 0.0 0.0 0.0 0.0 0.0 0.0 na 0.0
Net income -2.1 0.4 -1.0 -3.4 -0.6 -2.2 -72% 1.6
Growth metrics Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'20 % #
Sales growth y-o-y -62% 23% -30% -51% 3% -9% -131% 0.1
EBITDA growth y-o-y -126% -27% -120% 205% -116% 0% 25035% -1.2
EBIT growth y-o-y -148% -50% -359% 111% -72% 3% -2544% -0.7
Margins Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'20 % #
Gross margin 55% 40% 56% 44% 56% 44% 12% 0.1
EBITDA margin -22% 9% -3% -64% 3% -23% 26% 0.3
EBIT margin -34% 3% -12% -84% -10% -37% 27% 0.3
Deviation
20 August 2020 ABG Sundal Collier 4 Estimate changes
Source: ABG Sundal Collier, company data
Old forecast New forecast Change Change
P/L, SEKm 2020e 2021e 2022e 2020e 2021e 2022e 2020e 2021e 2022e 2020e 2021e 2022e
Sales 20.5 29.7 34.1 25.2 30.5 34.2 23% 3% 0% 4.8 0.9 0.1
Other income 3.8 3.7 3.7 2.8 3.7 3.7 -26% 0% 0% -1.0 0.0 0.0
COGS 29.7 43.6 50.2 38.0 44.9 50.3 28% 3% 0% 8.4 1.3 0.1
Gross result 9.2 13.9 16.0 12.8 14.4 16.1 39% 3% 0% 3.6 0.4 0.0
Gross margin 45% 47% 47% 51% 47% 47% 6% 0% 0%
Other external costs -8.9 -9.9 -10.6 -7.8 -9.1 -10.0 -13% -9% -6% 1.1 0.9 0.7
Personnel costs -8.4 -9.3 -10.2 -8.5 -9.2 -10.1 1% -1% -1% -0.1 0.1 0.1
D&A -3.2 -3.2 -3.1 -3.2 -3.2 -3.1 -3% 0% 0% -0.1 0.0 0.0
EBIT -7.6 -4.8 -4.1 -3.8 -3.4 -3.3 nmf nmf nmf 3.8 1.3 0.8
EBIT margin -37% -16% -12% -15% -11% -10%
Net financials -0.4 -0.5 -0.6 -0.3 -0.5 -0.6 -15% 0% 0% 0.1 0.0 0.0
EBT -8.0 -5.3 -4.7 -4.1 -3.9 -3.9 nmf nmf nmf 3.8 1.3 0.8
Tax 0.0 0.0 0.0 0.0 0.0 0.0 nmf nmf nmf 0.0 0.0 0.0
Net income -8.0 -5.3 -4.7 -4.1 -3.9 -3.9 nmf nmf nmf 3.8 1.3 0.8
20 August 2020 ABG Sundal Collier 5
Financial overview
Motion Display’s Q2 sales of SEK 5.7m held up slightly better than expected (+13%
vs. ABGSCe), and grew 3% y-o-y (and +91% q-o-q). Even so, as shown in the left- hand graph below, the company’s sales are quite volatile on a quarterly basis, which reflects the relatively small size of the company.
Sales growth y-o-y
Source: ABG Sundal Collier, company data
R12m sales (SEKm) & growth y-o-y
Source: ABG Sundal Collier, company data
Because of the company’s relatively scalable business model, owing to its gross margins above 40%, its recent trajectory of declining sales has resulted in negative profits in terms of EBIT. Even so, we wish to highlight that MODI has reported strong margins in quarters where its sales growth has been high. In Q2’18, for example, the firm reported an EBIT margin of 27%.
EBIT (SEKm), quarterly
Source: ABG Sundal Collier, company data
Gross margins, quarterly
Source: ABG Sundal Collier, company data
Because MODI has reported soft financials in recent quarters, our expectations for H2’20e are in general relatively low, where we find ourselves forecasting y-o-y sales growth of -10% vs. H2’19. While MODI has proven itself commercially in recent years (2015-2019 sales CAGR of 27%), we await positive signs before we pencil in any higher sales growth assumptions into our forecast. That said, we still see sales growth of 21% in 2021e, mainly due to easy comps (given that the COVID-19 pandemic has taken its toll on its 2020 sales).
209%
121%
8% 13%
-63% -62%
23%
-30%
-51%
3%
-32%
23%
-100%
-50%
0%
50%
100%
150%
200%
250%
Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20e Q4'20e
40.5
48.5 49.2 50.4
40.2
31.1 33.2 30.1
27.0 27.1
23.6 25.2 35%
50%
36%
71%
-1%
-36% -33% -40% -33%
-13%
-29%
-16%
-60%
-10%
40%
90%
140%
0.0 10.0 20.0 30.0 40.0 50.0 60.0
Sales R12m sales y-o-y
-1.1 -0.8 0.2
-0.6 3.1
4.3
0.9 0.4
-1.6 -2.0
0.4
-0.9
-3.3 -0.6
0.2
-0.1
-4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0
EBIT
48%
55%
47%
34%
44%
54%
48% 47%
41%
55%
40%
56%
44%
56%
49% 51%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Gross margin R12m gross margin
20 August 2020 ABG Sundal Collier 6 Sales and EBIT (SEKm), yearly
Source: ABG Sundal Collier, company data 7.4
11.4
31.3 29.4
50.4
30.1
25.2
30.5
34.2
-15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0
0.0 10.0 20.0 30.0 40.0 50.0 60.0
2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Net sales EBIT
20 August 2020 ABG Sundal Collier 7 Interim breakdown of forecasts
Source: ABG Sundal Collier, company data
P/L, SEKm Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20e Q4'20e 2015 2016 2017 2018 2019 2020e 2021e 2022e
Net sales 6.1 5.6 11.2 7.3 3.0 5.7 7.6 8.9 11.4 31.3 29.4 50.4 30.1 25.2 30.5 34.2
COGS -3.6 -2.5 -6.7 -3.2 -1.7 -2.5 -3.9 -4.4 -6.7 -16.4 -16.2 -26.1 -16.0 -12.4 -16.2 -18.1
Gross result 2.5 3.1 4.5 4.1 1.3 3.2 3.7 4.6 4.7 14.9 13.3 24.3 14.1 12.8 14.4 16.1
Other revenues 1.4 0.5 1.5 0.6 1.0 0.2 0.7 0.9 3.3 2.4 2.2 3.6 4.0 2.8 3.7 3.7
OPEX -4.7 -4.9 -4.8 -5.0 -4.8 -3.2 -3.5 -4.8 -15.0 -14.1 -15.1 -16.3 -19.3 -16.3 -18.3 -20.1
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 0.0 0.0
EBITDA -0.8 -1.3 1.2 -0.2 -2.5 0.2 1.0 0.7 -6.9 3.2 0.4 11.6 -1.2 -0.7 -0.2 -0.3
D&A -0.7 -0.7 -0.7 -0.7 -0.8 -0.8 -0.8 -0.8 -2.7 -2.8 -2.8 -3.0 -3.0 -3.2 -3.2 -3.1
EBIT -1.6 -2.0 0.4 -0.9 -3.3 -0.6 0.2 -0.1 -9.7 0.3 -2.5 8.6 -4.1 -3.8 -3.4 -3.3
Net financials -0.1 -0.1 -0.1 -0.1 -0.1 0.0 -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3 -0.5 -0.6
EBT -1.6 -2.1 0.4 -1.0 -3.4 -0.6 0.1 -0.2 -9.9 0.1 -2.7 8.4 -4.4 -4.1 -3.9 -3.9
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 0.0 0.0
Net incom e -1.6 -2.1 0.4 -1.0 -3.4 -0.6 0.1 -0.2 -9.9 0.1 -2.7 8.4 -4.4 -4.1 -3.9 -3.9
EPS basic (SEK) -0.16 -0.20 0.04 -0.10 -0.33 -0.06 0.01 -0.02 -0.95 0.01 -0.26 0.81 -0.42 -0.40 -0.23 -0.23
Grow th m etrics
Sales grow th q-o-q -41% -9% 101% -35% -59% 91% 33% 18%
Sales grow th y-o-y -63% -62% 23% -30% -51% 3% -32% 23% 174% -6% 71% -40% -16% 21% 12%
EBITDA grow th y-o-y nfm nfm -27% nfm 205% nfm -18% nfm nfm -88% nfm nfm -42% -66% 19%
EBIT grow th y-o-y nfm nfm -50% nfm 111% -72% -59% -88% nfm nfm nfm nfm -7% -10% -3%
Margins
Gross margin 41% 55% 40% 56% 44% 56% 49% 51% 41% 48% 45% 48% 47% 51% 47% 47%
EBITDA margin -11% -22% 9% -3% -64% 3% 12% 7% -47% 9% 1% 21% -3% -2% -1% -1%
Adj. EBIT margin -21% -34% 3% -12% -84% -10% 2% -1% -66% 1% -8% 16% -12% -14% -10% -9%
FCF & cash position
FCF 3.5 -1.9 -4.0 4.6 -2.0 -0.8 -8.0 -0.1 -2.7 -1.8 2.2 -1.4 -5.5 -5.0
Cash 3.6 3.2 0.1 2.2 0.5 0.2 1.9 3.3 1.2 0.1 2.2 6.8 11.4 8.3
R12m FCF 1.0 -0.9 -2.8 2.2 -3.3 -2.2
20 August 2020 ABG Sundal Collier 8
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)
20 August 2020 ABG Sundal Collier 9 Source: ABG Sundal Collier, Company data
Income Statement (SEKm) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020e Q4 2020e
Sales 6 6 11 7 3 6 8 9
COGS -4 -2 -7 -3 -2 -3 -4 -4
Gross profit 2 3 5 4 1 3 4 5
Other operating items -3 -4 -3 -4 -4 -3 -3 -4
EBITDA -1 -1 1 -0 -3 0 1 1
Depreciation and amortisation -1 -1 -1 -1 -1 -1 -1 -1
EBITA -2 -2 0 -1 -3 -1 0 -0
EO items 0 0 0 0 0 0 0 0
Impairment and PPA amortisation 0 0 0 0 0 0 0 0
EBIT -2 -2 0 -1 -3 -1 0 -0
Net financial items -0 -0 -0 -0 -0 -0 -0 -0
Pretax profit -2 -2 0 -1 -3 -1 0 -0
Tax 0 0 0 0 0 0 0 0
Net profit -2 -2 0 -1 -3 -1 0 -0
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 -2 -2 0 -1 -3 -1 0 -0
EPS -0.16 -0.20 0.04 -0.10 -0.33 -0.06 0.01 -0.02
EPS Adj -0.16 -0.20 0.04 -0.10 -0.33 -0.06 0.01 -0.02
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 (%) 40.7 55.0 40.3 56.3 44.2 55.6 49.1 51.3
EBITDA margin (%) -13.4 -23.5 10.5 -3.1 -84.0 3.5 12.6 7.5
EBITA margin (%) -25.6 -36.9 3.9 -13.0 -111.0 -10.2 2.3 -1.2
EBIT margin (%) -25.6 -36.9 3.9 -13.0 -111.0 -10.2 2.3 -1.2
Pretax margin (%) -26.8 -37.9 3.4 -14.0 -113.4 -10.9 1.0 -2.4
Net margin (%) -26.8 -37.9 3.4 -14.0 -113.4 -10.9 1.0 -2.4
Growth rates Y/Y Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020e Q4 2020e
Sales growth (%) -62.5 -62.2 23.3 -29.5 -51.2 2.8 -32.0 22.8
EBITDA growth (%) -chg -chg -27.3 -chg -chg +chg -18.4 +chg
EBIT growth (%) -chg -chg -49.8 -chg -chg +chg -59.0 +chg
Net profit growth (%) -chg -chg -53.5 -chg -chg +chg -79.6 +chg
EPS growth (%) -chg -chg -53.5 -chg -chg +chg -79.6 +chg
Adj earnings numbers Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020e Q4 2020e
EBITDA Adj -1 -1 1 -0 -3 0 1 1
EBITDA Adj margin (%) -13.4 -23.5 10.5 -3.1 -84.0 3.5 12.6 7.5
EBITA Adj -2 -2 0 -1 -3 -1 0 -0
EBITA Adj margin (%) -25.6 -36.9 3.9 -13.0 -111.0 -10.2 2.3 -1.2
EBIT Adj -2 -2 0 -1 -3 -1 0 -0
EBIT Adj margin (%) -25.6 -36.9 3.9 -13.0 -111.0 -10.2 2.3 -1.2
Pretax profit Adj -2 -2 0 -1 -3 -1 0 -0
Net profit Adj -2 -2 0 -1 -3 -1 0 -0
Net profit to shareholders Adj -2 -2 0 -1 -3 -1 0 -0
Net Adj margin (%) -26.8 -37.9 3.4 -14.0 -113.4 -10.9 1.0 -2.4
20 August 2020 ABG Sundal Collier 10 Source: ABG Sundal Collier, Company data
Income Statement (SEKm) 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Sales 6 7 11 31 29 50 30 25 31 34
COGS -4 -5 -7 -16 -16 -26 -16 -12 -16 -18
Gross profit 3 3 5 15 13 24 14 13 14 16
Other operating items -13 -13 -12 -12 -13 -13 -15 -13 -15 -16
EBITDA -11 -10 -7 3 0 12 -1 -1 -0 -0
Depreciation and amortisation -2 -2 -3 -3 -3 -3 -3 -3 -3 -3
Of which leasing depreciation 0 0 0 0 0 0 0 0 0 0
EBITA -12 -12 -10 0 -2 9 -4 -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 -12 -12 -10 0 -2 9 -4 -4 -3 -3
Net financial items -0 -0 -0 -0 -0 -0 -0 -0 -1 -1
Pretax profit -13 -13 -10 0 -3 8 -4 -4 -4 -4
Tax 0 0 0 0 0 0 0 0 0 0
Net profit -13 -13 -10 0 -3 8 -4 -4 -4 -4
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 -13 -13 -10 0 -3 8 -4 -4 -4 -4
EPS -2.25 -1.40 -0.95 0.01 -0.26 0.81 -0.42 -0.40 -0.23 -0.23
EPS Adj -2.25 -1.40 -0.95 0.01 -0.26 0.81 -0.42 -0.40 -0.23 -0.23
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 (%) 43.7 38.0 41.0 47.5 45.2 48.2 47.0 50.8 47.0 47.0
EBITDA margin (%) -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.9 -2.7 -0.8 -0.8
EBITA margin (%) -193.7 -168.1 -84.8 1.1 -8.4 17.1 -13.7 -15.2 -11.2 -9.7
EBIT margin (%) -193.7 -168.1 -84.8 1.1 -8.4 17.1 -13.7 -15.2 -11.2 -9.7
Pretax margin (%) -200.4 -170.6 -86.7 0.3 -9.2 16.6 -14.5 -16.4 -12.9 -11.5
Net margin (%) -200.4 -170.6 -86.7 0.3 -9.2 16.6 -14.5 -16.4 -12.9 -11.5
Growth rates Y/Y 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Sales growth (%) -21.2 17.5 54.0 174.4 -5.9 71.1 -40.2 -16.2 21.0 12.0
EBITDA growth (%) 16.1 1.5 33.3 145.6 -88.5 3,084.6 -110.1 42.3 65.8 -19.3
EBIT growth (%) 10.6 -2.0 22.3 103.5 -828.4 447.1 -147.9 7.3 10.4 3.1
Net profit growth (%) 11.7 0 21.7 101.0 -2,757.8 409.1 -152.3 5.4 5.2 0.1
EPS growth (%) 11.7 37.9 32.0 101.0 -2,757.8 409.1 -152.3 5.4 42.2 0.1
Profitability 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
ROE (%) -394.1 -159.3 -74.8 0.9 -28.5 67.9 -30.5 -41.1 -35.6 -32.4
ROE Adj (%) -394.1 -159.3 -74.8 0.9 -28.5 67.9 -30.5 -41.1 -35.6 -32.4
ROCE (%) -222.2 -132.4 -63.2 2.3 -17.1 47.3 -20.0 -19.6 -14.6 -13.0
ROCE Adj(%) -222.2 -132.4 -63.2 2.3 -17.1 47.3 -20.0 -19.6 -14.6 -13.0
ROIC (%) -365.0 -151.3 -73.2 2.8 -20.2 49.1 -21.2 -25.6 -23.9 -21.2
ROIC Adj (%) -365.0 -151.3 -73.2 2.8 -20.2 49.1 -21.2 -25.6 -23.9 -21.2
Adj earnings numbers 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
EBITDA Adj -11 -10 -7 3 0 12 -1 -1 -0 -0
EBITDA Adj margin (%) -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.9 -2.7 -0.8 -0.8
EBITDA lease Adj -11 -10 -7 3 0 12 -1 -1 -0 -0
EBITDA lease Adj margin (%) -167.6 -140.5 -60.9 10.1 1.2 23.0 -3.9 -2.7 -0.8 -0.8
EBITA Adj -12 -12 -10 0 -2 9 -4 -4 -3 -3
EBITA Adj margin (%) -193.7 -168.1 -84.8 1.1 -8.4 17.1 -13.7 -15.2 -11.2 -9.7
EBIT Adj -12 -12 -10 0 -2 9 -4 -4 -3 -3
EBIT Adj margin (%) -193.7 -168.1 -84.8 1.1 -8.4 17.1 -13.7 -15.2 -11.2 -9.7
Pretax profit Adj -13 -13 -10 0 -3 8 -4 -4 -4 -4
Net profit Adj -13 -13 -10 0 -3 8 -4 -4 -4 -4
Net profit to shareholders Adj -13 -13 -10 0 -3 8 -4 -4 -4 -4
Net Adj margin (%) -200.4 -170.6 -86.7 0.3 -9.2 16.6 -14.5 -16.4 -12.9 -11.5
20 August 2020 ABG Sundal Collier 11 Source: ABG Sundal Collier, Company data
Cash Flow Statement (SEKm) 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
EBITDA -11 -10 -7 3 0 12 -1 -1 -0 -0
Net financial items -0 -0 -0 -0 -0 -0 -0 -0 -1 -1
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 -11 -11 -7 3 0 11 -1 -1 -1 -1
Change in WC 0 -6 2 -1 0 -10 7 2 -1 -1
Operating cash flow -11 -16 -5 2 0 2 6 1 -2 -2
CAPEX tangible fixed assets 0 0 0 0 0 0 0 0 0 0
CAPEX intangible fixed assets -3 -3 -3 -2 -3 -3 -4 -3 -4 -4
Acquisitions and disposals 0 0 0 0 0 0 0 0 0 0
Free cash flow -14 -20 -8 -0 -3 -2 2 -1 -5 -5
Dividend paid 0 0 0 0 0 0 0 0 0 0
Share issues and buybacks 7 23 5 0 0 0 0 0 10 0
Lease liability amortisation 0 0 0 0 0 0 0 0 0 0
Other non cash items -0 5 0 -0 -0 0 -0 -0 0 0
Decrease in net IB debt -4 4 -3 0 -3 -2 2 -1 5 -5
Balance Sheet (SEKm) 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Goodwill 0 0 0 0 0 0 0 0 0 0
Other intangible assets 7 8 9 8 8 8 9 9 9 9
Tangible fixed assets 0 0 0 0 1 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 7 9 9 8 8 9 10 9 10 10
Inventories 3 7 6 4 8 12 10 8 10 11
Receivables 1 2 4 7 7 9 3 3 4 4
Other current assets 0 0 0 3 1 3 3 2 2 3
Cash and liquid assets 0 2 2 3 1 0 2 7 11 8
Total assets 11 21 20 25 26 34 28 29 37 36
Shareholders equity 0 16 11 11 8 17 12 8 14 10
Minority 0 0 0 0 0 0 0 0 0 0
Total equity 0 16 11 11 8 17 12 8 14 10
Long-term debt 1 0 3 3 2 4 3 9 9 11
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 1 1 0 2 3 3 3 3 3 3
Accounts payable 2 1 2 4 6 6 5 5 5 6
Other current liabilities 7 3 4 5 6 5 4 4 5 6
Total liabilities and equity 11 21 20 25 26 34 28 29 37 36
Net IB debt 2 -1 1 1 4 6 4 6 1 6
Net IB debt excl. pension debt 2 -1 1 1 4 6 4 6 1 6
Net IB debt excl. leasing 2 -1 1 1 4 6 4 6 1 6
Capital invested 2 14 12 12 12 23 16 14 15 16
Working capital -5 6 3 4 4 14 6 4 5 6
EV breakdown 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Market cap. diluted (m) na 43 42 72 85 101 35 19 31 31
Net IB debt Adj 2 -1 1 1 4 6 4 6 1 6
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 42 43 73 89 107 40 24 32 37
Capital efficiency 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Total assets turnover (%) 49.1 46.3 56.1 139.7 116.9 168.9 97.3 88.4 92.3 93.3
Working capital/sales (%) -46.8 6.1 39.1 11.3 13.5 17.8 33.6 20.9 15.5 16.6
Financial risk and debt service 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Net debt/equity 10.01 -0.10 0.14 0.11 0.53 0.37 0.34 0.70 0.07 0.60
Net debt/market cap na -0.02 0.04 0.02 0.04 0.05 0.06 0.30 0.03 0.20
Equity ratio (%) 1.8 76.2 53.5 44.0 31.7 48.7 43.5 27.4 38.0 28.0
Net IB debt adj./equity 10.01 -0.10 0.14 0.12 0.53 0.37 0.34 0.70 0.07 0.60
Current ratio 0.42 2.65 1.75 1.48 1.13 1.80 1.46 1.68 2.02 1.77
EBITDA/net interest -24.85 -57.49 -32.43 13.23 1.60 48.30 -4.66 -2.14 -0.46 -0.46
Net IB debt/EBITDA -0.20 0.14 -0.21 0.39 11.87 0.53 -3.54 -8.24 -4.47 -22.03
Net IB debt/EBITDA lease Adj -0.20 0.14 -0.21 0.40 11.89 0.53 -3.55 -8.25 -4.50 -22.05
Interest cover -28.73 -68.80 -45.20 1.43 -10.94 35.92 -16.39 -12.08 -6.86 -5.54
20 August 2020 ABG Sundal Collier 12 Source: ABG Sundal Collier, Company data
Valuation and Ratios (SEKm) 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Shares outstanding adj. 6 9 10 10 10 10 10 10 17 17
Fully diluted shares Adj 6 9 10 10 10 10 10 10 17 17
EPS -2.25 -1.40 -0.95 0.01 -0.26 0.81 -0.42 -0.40 -0.23 -0.23
Dividend per share Adj 0 0 0 0 0 0 0 0 0 0
EPS Adj -2.25 -1.40 -0.95 0.01 -0.26 0.81 -0.42 -0.40 -0.23 -0.23
BVPS 0.04 1.73 1.04 1.05 0.78 1.59 1.17 0.77 0.83 0.60
BVPS Adj -1.16 0.85 0.22 0.29 0.03 0.83 0.30 -0.06 0.30 0.04
Net IB debt / share 0.4 -0.2 0.1 0.1 0.4 0.6 0.4 0.5 0.1 0.4
Share price na 4.78 4.00 6.90 8.15 9.68 3.40 1.80 1.80 1.80
Market cap. (m) na 43 42 72 85 101 35 19 31 31
Valuation 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
P/E na -3.4 -4.2 703.2 -31.3 12.0 -8.1 -4.5 -7.8 -7.8
EV/sales na 5.63 3.78 2.33 3.02 2.12 1.31 0.96 1.04 1.08
EV/EBITDA na -4.0 -6.2 23.1 244.6 9.2 -33.6 -35.9 -137.2 -133.3
EV/EBITA na -3.3 -4.5 214.0 -35.9 12.4 -9.6 -6.3 -9.3 -11.1
EV/EBIT na -3.3 -4.5 214.0 -35.9 12.4 -9.6 -6.3 -9.3 -11.1
Dividend yield (%) na 0 0 0 0 0 0 0 0 0
FCF yield (%) na -46.2 -19.2 -0.1 -3.2 -1.8 6.2 -7.6 -17.8 -16.4
Lease adj. FCF yield (%) na -46.2 -19.2 -0.1 -3.2 -1.8 6.2 -7.6 -17.8 -16.4
P/BVPS na 2.76 3.86 6.60 10.39 6.08 2.91 2.34 2.18 3.03
P/BVPS Adj na 5.65 18.60 23.76 236.00 11.60 11.38 -29.63 5.98 40.35
P/E Adj na -3.4 -4.2 703.2 -31.3 12.0 -8.1 -4.5 -7.8 -7.8
EV/EBITDA Adj na -4.0 -6.2 23.1 244.6 9.2 -33.6 -35.9 -137.2 -133.3
EV/EBITA Adj na -3.3 -4.5 214.0 -35.9 12.4 -9.6 -6.3 -9.3 -11.1
EV/EBIT Adj na -3.3 -4.5 214.0 -35.9 12.4 -9.6 -6.3 -9.3 -11.1
EV/cap. employed na 2.5 3.1 4.7 6.5 4.7 2.1 1.2 1.2 1.5
Investment ratios 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e
Capex/sales 50.6 47.1 28.5 6.7 9.9 6.8 13.3 10.9 11.5 10.2
Capex/depreciation 193.7 170.2 118.9 74.5 102.8 115.3 135.8 87.0 109.4 114.8
Capex tangibles/tangible fixed assets 0 0 0 0 0 0 0 0 0 0
Capex intangibles/definite intangibles 47.4 43.5 38.1 26.8 37.5 43.6 44.3 31.7 39.1 37.3
Depreciation on intangibles/definite intangibles24.5 25.6 32.0 35.9 36.5 37.8 32.6 36.5 35.8 32.5
Depreciation on tangibles/tangibles 0 0 0 0 0 0 0 0 0 0
20 August 2020 ABG Sundal Collier 13 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 report.
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 that 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 to 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 underlying 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 ownership position for the analyst(s) and members of the analyst's household, ownership by ABG Sundal Collier, ownership in ABG Sundal Collier 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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