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INVL Technology
Investor Presentation • Apr 26, 2023
2265_rns_2023-04-26_3d792633-3b07-4c6a-97d0-eb48147cf74d.pdf
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NAV discount at historical high
The portfolio companies' revenues and profits were significantly above estimates. The external valuation of the portfolio companies is too low in our view. The NAV discount is at historical highs. We raise our estimates and Fair value per share.
Sales and earnings above
Q4/22 Sales of the portfolio companies was 34% or EUR 4.3m above our forecast (EUR 17.0m vs. est. EUR 12.7m), while the Q4/22 EBIT of EUR 1.3m was more than double our forecast of EUR 0.6m. The positive deviation is a result of successful price increases towards clients that started in H2/22.
Harsh valuation by external valuator
The external valuator set a year-end 2022 value of the financial assets to EUR 34.9m equal to a 1.2% decline vs. end of 2021. Given that 2022 Sales increased by 27% and that the H2/22 EBIT increased by 3.4x, we believe the external valuation was a bit harsh. Hence, we foresee the value of financial assets to be increased during 2023.
Base Case share price raised
We raise our sum-of-the-parts Base case Fair value per share to EUR 3.15 (prev. 3.00). This implies a P/Sales 2023E multiple of 0.85x based on all portfolio companies' sales, which we regard as conservative for a technology company. Compared to the external valuation NAV per share of EUR 3.17, the current share price indicates a NAV discount of 37%, which is far above the historical average of 20%.
Key figures (MEUR)
kljad;fljasfj ;ljasfj
| 2021 | 2022 | 2023E | 2024E | 2025E | |
|---|---|---|---|---|---|
| Holding company | |||||
| Fair value Financial assets* | 35.4 | 34.9 | 38.0 | 41.0 | 44.6 |
| Change Financial assets | 2.7 | -0.4 | 3.1 | 3.0 | 3.6 |
| Other income | 1.4 0.9 |
0.2 | 0.2 | ||
| Total income | 4.2 | 0.5 | 3.2 | 3.2 | 3.8 |
| Operating expenses | -0.7 | -0.7 | -0.7 | -0.7 | -0.8 |
| Accrued perf. fee | -0.8 | 2.3 | 0.0 | 0.0 | 0.0 |
| Net profit | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Portfolio companies | |||||
| Revenue (m) | 37.5 | 47.6 | 54.0 | 59.7 | 63.2 |
| EBIT (m) | 1.5 | 1.1 | 3.0 | 3.7 | 4.2 |
| Revenue growth | 1.6% | 26.7% | 13.6% | 10.4% | 6.0% |
| EBIT margin | 3.9% | 2.3% | 5.5% | 6.1% | 6.7% |
| P/Sales | 0.65 | 0.51 | 0.45 | 0.41 | 0.39 |
XXXXXXXXXXX Dsjf ;lj;lsa lkjdf lladksf ldjsf kjdsl fjljsf;lasdjfkljdkl Source: Company data, Enlight Research estimates, *external valuation (history), Enlight Research (estimate)
Baltics - Lithuania Commissioned Research – Q4 2022 Update
| Fair value range (EUR) | |
|---|---|
| Bull (P/Sales 1.1x) | 4.15 |
| Base (P/Sales 0.9x) | 3.15 |
| Bear(P/Sales 0.6x) | 2.15 |
| Key Data | |
| Price (EUR) | 2.02 |
| Ticker | INC1L |
| Country | Lithuania |
| Listed | Vilnius (Lithuania) |
| Market Cap (EURm) | 24.38 |
| Net debt (EURm) | -0.211.6 |
| Shares (m) | 12.2 |
| Free float | 35.62% |
| Price range | |
|---|---|
| 52-week high | 2.74 |
| 52-week low | 2.00 |
Analyst
Coverage frequency
2x per year
Key takeaways
Harsh valuation by external valuator
The Fair value of INVL Technology's financial assets (portfolio companies) is determined by an external valuation firm (Deloitte). At the end of 2022, the external valuation of the portfolio companies was set at EUR 34.9m corresponding to a decline of 1.2% or EUR 0.4m compared to the end of 2021. Meanwhile, the portfolio companies' total revenues increased by 27% in 2022. This means that the Fair value in relation Revenues (P/Sales) decreased from 0.9x at the end of 2021 to 0.7x at the end of 2022. In our view, the decrease in the P/Sales multiple was uncalled for as a multiple below 0.9x is already undervalued, especially given that 2022 Sales increased by 27% (although we understand that from a purely theoretical viewpoint, higher interest rate could pressure DCF valuations significantly). The largest discrepancy (EUR 7.5m) between our valuation and the external valuation comes from the Novian Companies. We believe a Fair value for Novian Companies is EUR 25.1m which corresponds to a weighted P/Sales 2023E multiple of 0.66x. This can be compared to the external valuation Fair value of EUR 17.6m corresponding to a P/Sales 2023E multiple of 0.47x. To us, it looks like the external valuation has not considered that around 25% of Novian Companies sales is software related and therefore commands a higher multiple than infrastructure related sales. We believe the difference in the NRD Companies valuation can be explained by our higher multiple for software related sales vs. consulting related sales (over half of NRD Companies sales is software related). Worth noting is that our NRD CS (Cybersecurity) valuation is lower than the external valuation (see table below).
Portfolio companies Sales & External valuation P/Sales multiple
Source: Company reports, share price from end of each year
*Implied P/Sales based on external valuation Fair value of portfolio companies in relation to portfolio companies' total sales
| FV vs. External valuation | End of 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Enlight Research | External valuation | |||||||
| Company | Fair Value (EURm) | Fair Value (EURm) | Diff. (EURm) | |||||
| NRD Companies | 12.1 | 7.3 | 4.8 | |||||
| Novian Companies | 25.1 | 17.6 | 7.5 | |||||
| NRD CS | 8.6 | 9.9 | -1.3 | |||||
| FINTime | 0.2 | 0.2 | 0.0 | |||||
| Total | 46.0 | 34.9 | 11.0 |
Source: Company reports (external valuation), Enlight Research (Fair value)
Significant Sales and EBIT improvement in H2/22
The portfolio companies successfully implemented price increases in H2/22 as old contracts expired. The higher rates were visible in both sales and profits. The H2/22 sales increased 33% y-on-y to EUR 28m, while H2/22 EBIT increased 3.4x to EUR 1.7m, equal to a margin of 6.1% (an improvement from the H2/21 EBIT margin of 2.4%). We believe the positive momentum will continue this year and forecast 11-15% y-on-y sales growth on a half-year basis with margins of 1.8% to 8.0%.
Source: Company report (historical), Enlight Research (estimates)
Source: Company report (historical), Enlight Research (estimates)
NAV discount at historically high level
The share price to NAV discount of 37% is at historically high levels. It has not been this high since Q4/18 when it also was at 37%. The historical NAV discount is around 20% which is also what we assume in our Fair value calculation. Compared to Nordic investment companies, INVL Technology's NAV discount appears high (see below chart). In our view, there is a fair chance that the NAV discount could close to the historical average of 20% if the positive momentum seen in H2/22 continues into 2023.
INVL Technology share NAV discount
Nordic investment companies NAV premium/discount
Source: Company reports, *share prices on 21 April 2023 (INVL Technology share price EUR 2.00)
Valuation
Peer multiples under pressure during market volatility
Since our last Q2/22 update in September 2022, all peer segments except Infrastructure peers saw a decline in their P/Sales median multiples. The Software peers' P/Sales multiple has declined to 2.5x from 3.0x while the Cybersecurity peers' P/Sales has declined to 1.9x from 2.2x. The Consulting P/Sales peer multiple has decreased to 0.70x from 0.78x. The Infrastructure peers went against the grain with an increased P/Sales multiple to 0.53x from 0.45x. Worth noting is that infrastructure services represent the biggest part of INVL Technology's sales (about half of group sales).
P/Sales multiple development since Initiation Q2/21 to Q4/22
Source: MarketScreener, Enlight Research, Introduce Research, DnB research, prices on 21 April 2023 Sep 2022 (Q2/22 Update) Apr 2023 (Q4/22 Update)
Base case Sum-of-the-parts (SOTP) Valuation
Our P/Sales 2023 Base case sum-of-the-parts (SOTP) valuation per share is raised to EUR 3.15 (prev. 3.00). Our valuation assumes NAV discount of 20%, which is consistent with the multi-year historic level. Our SOTP sales weighted P/Sales multiple of 0.8x implies a discount of around +33% to the weighted peer average P/Sales multiple of 1.3x.
Fair value Invalda Technology (Base case)
| Enlight | Enlight | |||||||
|---|---|---|---|---|---|---|---|---|
| Weighted P/Sales 2023 | (W)P/Sales | Sales | Sales | Sales | F V | FV/share | ||
| Base case | Peer avg. | discount | 2021 | 2022 | 2023E | (EURm) | (EUR) | |
| Business area: Business climate improvement & e-governance | ||||||||
| NRD Companies | 1.3 | 2.0 | 33% | 6.3 | 8.5 | 9.1 | 12.1 | 1.00 |
| Business area: IT services & software | ||||||||
| Novian Companies | 0.7 | 1.0 | 33% | 25.8 | 33.0 | 37.8 | 25.1 | 2.08 |
| Business area: Cybersecurity | ||||||||
| NRD CS | 1.2 | 1.8 | 33% | 5.4 | 6.1 | 7.2 | 8.6 | 0.71 |
| Business area: Business process outsourcing | ||||||||
| FINtime | n a | n a | n a | n a | n a | n a | 0.158 | 0.01 |
| Group total | 0.8 | 1.3 | 33% | 37.5 | 47.6 | 54.0 | 46.0 | 3.81 |
| Sales growth | 12% | 2 % | 27% | |||||
| Add Net cash: | 1.6 | 0.13 | ||||||
| Group total: | 47.6 | 3.94 | ||||||
| Less assumed NAV discount: | 20% | 20% | ||||||
| Less assumed NAV discount (EUR): | 9.5 | 0.79 | ||||||
| Enlight Base case Fair Value: | 38.1 | 3.15 |
Source: Historical figures (Company reports), Forecast figures (Enlight Research), Peer P/Sales average (MarketScreener, Enlight Research, Introduce). Based on peer valuation on 21 April 2023
P eer t ab les I T I n frast ru c t u re servic es
| Price Mcap (m) P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. EBIT marg. | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | Ticker | Ccy | (last) | (last) | 2021 | 2022 | 2023E | 2024E | 2021 | 2022 | 2023E | 2024E |
| Dustin | DUST | SEK | 37.24 | 4,243 | 0.27 | 0.18 | 0.17 | 0.16 | 3.6% | 3.2% | 2.4% | 3.2% |
| Proact IT | PACT | SEK | 113.40 | 3,113 | 0.88 | 0.65 | 0.64 | 0.62 | 4.9% | 5.6% | 5.7% | 5.9% |
| Atea | ATEA | NOK | 133.40 | 14,798 | 0.36 | 0.46 | 0.44 | 0.42 | 2.5% | 3.7% | 4.0% | 4.2% |
| CGit | CGIT B | SEK | 71.00 | 112 | 0.83 | 0.69 | 0.62 | 0.54 | 1.1% | 0.9% | 4.4% | 6.4% |
| Average | 0 . 5 8 | 0 . 5 0 | 0 . 4 7 | 0 . 4 3 | 3 . 0 % | 3 . 4 % | 4 . 1 % | 4 . 9 % | ||||
| Med ian | 0 . 5 9 | 0 . 5 6 | 0 . 5 3 | 0 . 4 8 | 3 . 1 % | 3 . 5 % | 4 . 2 % | 5 . 1 % | ||||
| Cyb ersec u rit y | ||||||||||||
| Price Mcap (m) P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. EBIT marg. | |||||||||
| Company | Ticker | Ccy | (last) | (last) | 2021 | 2022 | 2023E | 2024E | 2021 | 2022 | 2023E | 2024E |
| Clavister Holding | CLAV | SEK | 3.64 | 206 | 1.6 | 1.4 | 1.2 | 1.1 | -41.7% | -35.9% | -15.2% | -9.1% |
| Freja eID Group | FREJA | SEK | 6.88 | 130 | 6.3 | 4.4 | 2.3 | 1.6 | -228.6% | -126.5% | -26.9% | -6.1% |
| Withsecure OYJ | FSC1V | EUR | 1.64 | 288 | 1.2 | 2.1 | 1.9 | 1.7 | 10.7% | -31.6% | -14.5% | -3.6% |
| Average | 3 . 0 | 2 . 7 | 1 . 8 | 1 . 4 | -8 7 % | -6 4 . 7 % | -1 8 . 9 % | -6 . 3 % | ||||
| Med ian | 1 . 6 | 2 . 1 | 1 . 9 | 1 . 6 | -4 2 % | -3 5 . 9 % | -1 5 . 2 % | -6 . 1 % | ||||
| Average ex c lu d in g ex t rem es | 3 % | -1 3 . 5 % | ||||||||||
| So ft w are | ||||||||||||
| Price Mcap (m) P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. EBIT marg. | |||||||||
| Company | Ticker | Ccy | (last) | (last) | 2021 | 2022 | 2023E | 2024E | 2021 | 2022 | 2023E | 2024E |
| Agillic | AGILC | DKK | 2 6 | 267 | 5.1 | 4.0 | 3.3 | 2.9 | -21% | 2 % | 3 % | 5 % |
| Artificial Solutions | ASAI | SEK | 1.19 | 122 | 3.1 | 2.7 | 2.0 | 1.1 | -181% | -195% | -143% | -42% |
| Briox | BRIX | SEK | 3.3 | 189 | 30.6 | 21.9 | 13.9 | 9.9 | -319% | -263% | -153% | -87% |
| Efecte Oyj | EFECTE | EUR | 10.5 | 6 7 | 3.8 | 3.1 | 2.7 | 2.3 | 2 % | -2% | -3% | 4 % |
| FormPipe Software | FPIP | SEK | 25.4 | 1,377 | 2.9 | 2.8 | 2.5 | 2.3 | 15% | 3 % | 9 % | 13% |
| Fortnox | FNOX | SEK | 70.47 | 42,969 | 46.1 | 33.7 | 25.6 | 19.6 | 34% | 36% | 40% | 44% |
| LeadDesk Oyj | LEADD | EUR | 11.15 | 6 1 | 2.5 | 2.2 | 2.0 | 1.7 | -4% | -5% | -3% | 2 % |
| Lime Technologies | LIME | SEK | 235.3 | 3,125 | 7.7 | 6.4 | 5.6 | 4.8 | 19% | 19% | 19% | 20% |
| Litium | LITI | SEK | 9.6 | 159 | 2.8 | 2.5 | 2.0 | 1.6 | -22% | -19% | -5% | 10% |
| Siili Solutions Oyj | SIILI | EUR | 15.6 | 127 | 1.3 | 1.1 | 1.0 | 0.9 | 8 % | 9 % | 10% | 11% |
| BuildData | BUILD | SEK | 1.9 | 119 | 2.7 | 1.4 | 1.2 | 1.1 | -25% | -27% | -29% | -4% |
| Average | 9 . 9 | 7 . 4 | 5 . 6 | 4 . 4 | -4 5 % | -4 0 % | -2 3 % | -2 % | ||||
| Med ian | 3 . 1 | 2 . 8 | 2 . 5 | 2 . 3 | -4 . 0 % | -1 . 5 % | -2 . 6 % | 5 . 4 % | ||||
| Average ex c lu d in g ex t rem es | 3 . 5 | 2 . 9 | 2 . 5 | 2 . 1 | ||||||||
| I T Co n su lt in g | ||||||||||||
| Price Mcap (m) P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. EBIT marg. | |||||||||
| Company | Ticker | Ccy | (last) | (last) | 2021 | 2022 | 2023E | 2024E | 2021 | 2022 | 2023E | 2024E |
| B3 Consulting Group | B3 | SEK | 196.8 | 1,725 | 1.87 | 1.50 | 1.35 | 1.20 | 7.6% | 12.0% | 11.6% | 12.2% |
| CAG Group | CAG | SEK | 104 | 745 | 1.14 | 0.93 | 0.85 | 0.79 | 8.0% | 9.1% | 8.3% | 9.1% |
| Digia Oyj | DIGIA | EUR | 5.78 | 154 | 0.99 | 0.90 | 0.86 | 0.83 | 9.4% | 7.4% | 8.3% | 9.9% |
| Solteq Oyj | SOLTEQ | EUR | 1.337 | 2 6 | 0.38 | 0.38 | 0.37 | 0.34 | 10.3% | -6.4% | 1.2% | 6.2% |
| Time People Group | TPGR | SEK | 20.6 | 149 | 0.77 | 0.51 | 0.44 | 0.41 | 6.5% | 8.2% | 5.9% | 7.2% |
| Innofactor Plc | IFA1V | EUR | 1.145 | 4 2 | 0.63 | 0.59 | 0.55 | 0.52 | 9.8% | 6.7% | 7.8% | 8.3% |
| Average | 0 . 9 6 | 0 . 8 0 | 0 . 7 4 | 0 . 6 8 | 8 . 6 % | 6 . 2 % | 7 . 2 % | 8 . 8 % | ||||
| Med ian | 0 . 8 8 | 0 . 7 5 | 0 . 7 0 | 0 . 6 6 | 8 . 7 % | 7 . 8 % | 8 . 0 % | 8 . 7 % |
Source: MarketScreener, Enlight Research, Introduce. Based on share prices on 21 April 2023
Q4 Estimates vs. Outcome
Portfolio companies estimates vs. outcome
The Q4/22 Group Sales of EUR 17.0m was 33.8% or EUR 4.3m above our EUR 12.7m estimate. The main reason for the higher than expected Group sales was the Novian segment, which posted Q4/22 sales of EUR 11.4m (~2/3 of Group sales), which was EUR 2.6m above our forecast. The NRD Companies segment's sales was EUR 2.0m above forecast, while the Cybersecurity segment came in EUR 0.3m below estimate. The Q4/22 Group EBIT of EUR 1.3m was EUR 0.7m above our EBIT forecast of EUR 0.6m. The main reason for the positive Q4/22 Group EBIT deviation was the Novian segment, which posted EUR 0.4m higher than forecast EBIT.
| Q4/22 | Q4/22 | Diff. Q3/22 | ||
|---|---|---|---|---|
| Sales by portfolio company (EURm) | Estimate | Outcome | EURm | % |
| NRD Companies | 1.448 | 3.441 | 1.993 | 137.6% |
| Novian (incl. ELSIS PRO) | 8.848 | 11.404 | 2.556 | 28.9% |
| NRD CS | 2.431 | 2.179 | -0.252 | -10.4% |
| Group sales (incl. Elsis PRO) | 12.727 | 17.024 | 4.297 | 33.8% |
| Q4/22 | Q4/22 | Diff. Q3/22 | ||
| Sales growth | Estimate | Outcome | EURm | %-pts |
| NRD Companies | -2.7% | 131.3% | nm | 133.9 |
| Novian | -7.4% | 19.8% | nm | 27.2 |
| NRD CS | 10.3% | -1.1% | nm | -11.4 |
| Group sales growth (incl. Elsis PRO) | -3.9% | 28.8% | nm | 3276 |
| Q4/22 | Q4/22 | Diff. Q3/22 | ||
| EBIT by portfolio company (EURm) | Estimate | Outcome | EURm | % |
| NRD Companies | 0.188 | 0.382 | 0.194 | 103.2% |
| Novian (incl. Elsis PRO) | 0.496 | 0.940 | 0.444 | 89.4% |
| NRD CS | 0.076 | 0.070 | -0.006 | -7.6% |
| Eliminations | -0.201 | -0.092 | 0.109 | -54.2% |
| Group EBIT (after Eliminations) | 0.559 | 1.300 | 0.741 | 132.5% |
| Q4/22 | Q4/22 | Diff. Q3/22 | ||
| EBIT margin by Segment | Estimate | Outcome | EURm | %-pts |
| NRD Companies | 13.0% | 11.1% | nm | -1.9 |
| Novian (incl. Elsis PRO) | 5.6% | 8.2% | nm | 2.6 |
| NRD CS | 3.1% | 3.2% | nm | 0.1 |
Source: Company reports, Enlight Research
Estimate changes
Portfolio companies Estimate changes
Our Total Sales estimate for all portfolio companies is raised by 12-14% in the forecast period 2023-25E. Our Total EBIT estimate for all portfolio companies is raised by EUR 7-14% in the forecast period 2023-25E. The main reason for our raised estimates is the NRD Companies and the Novian segment.
| Sales all portfolio companies (EURm) | 2023E | 2024E | 2025E |
|---|---|---|---|
| Old estimate | 48.1 | 52.7 | 55.3 |
| New estimate | 54.0 | 59.7 | 63.2 |
| Change | 5.9 | 7.0 | 7.9 |
| Change (pct) | 12.3% | 13.2% | 14.3% |
| EBIT all portfolio companies (EURm) | 2023E | 2024E | 2025E |
|---|---|---|---|
| Old estimate | 2.6 | 3.4 | 4.0 |
| New estimate | 3.0 | 3.7 | 4.2 |
| Change | 0.4 | 0.3 | 0.3 |
| Change (pct) | 14.1% | 8.8% | 7.0% |
Source: Enlight Research
Holding company Estimate changes
We lower our Fair value (FV) of financial assets by 9-14% in the forecast period 2023- 25E following the conservative external valuation. The change in FV of financial assets has significant impact on the Holding company's estimated Total income and EBIT as they are mainly made up of FV changes. Important to note is that the Holding company Income statement mainly consist of non-cash flow items e.g., the Change in FV of financial assets will not be converted to cash until exits are made, while the performance fee provisions will not become a cash outflow until it is paid out at the end of the company life (2026 or later).
Holding company Estimate changes
| Fair value financial assets | 2023E | 2024E | 2025E |
|---|---|---|---|
| Old estimate | 41.6 | 47.9 | 49.9 |
| New estimate | 38.0 | 41.0 | 44.6 |
| Change | -3.6 | -6.9 | -5.2 |
| Change (pct) | -8.6% | -14.4% | -10.5% |
| Change FV financial assets | 2023E | 2024E | 2025E |
| Old estimate | 5.7 | 6.3 | 2.0 |
| New estimate | 3.1 | 3.0 | 3.6 |
| Change | -2.6 | -3.3 | 1.7 |
| Change (pct) | -46.1% | -52.7% | 84.8% |
| Total income | 2023E | 2024E | 2025E |
| Old estimate | 5.9 | 6.5 | 2.1 |
| New estimate | 3.2 | 3.2 | 3.8 |
| Change | -2.6 | -3.3 | 1.7 |
| Change (pct) | -44.8% | -51.4% | 78.1% |
| EBIT | 2023E | 2024E | 2025E |
| Old estimate | 4.2 | 4.7 | 0.4 |
| New estimate | 2.5 | 2.4 | 3.0 |
| Change | -1.6 | -2.3 | 2.6 |
| Change (pct) | -39.1% | -49.2% | 702.7% |
Risk factors
Below is a list of what we believe are some of the most important risks, however, this list should not be regarded as a complete list of risks. For examples of additional risks, we refer to the listing document and company reports.
COVID-19 risk
So far, the effect of the Covid-19 on INVL Technology's portfolio companies has been limited. Our estimates do not assume travel restrictions will be implemented again.
Risk of change of technology
The technology sector is in constant change. Failure to adapt and learn a new technology could result in a drop in sale and earnings and hence lower the Fair value of the company.
The state of the M&A market
If the market for mergers and acquisitions is depressed during the exit phase (mainly 2026 with possible 2 years extension), the deal valuations could be lower than expected and it could be hard to sell portfolio companies.
Political risk
A significant share of clients are public institutions and hence the company has exposure to public sector contracts, which entails political risks.
Intellectual Property risk
A significant share of the company's assets consists of intellectual property in the form of proprietary software and technology know-how. Therefore, the risk that somebody will try and steal intellectual property is present.
Valuation risk
The fair value of the holding companies is done by an independent external valuation firm. However, there is no guarantee that the final exit price of company will be according to the external valuation, nor to our valuation.
NAV discount risk
Even though the NAV of INVL Technology increases, there is no guarantee that the share price will increase in-line with the NAV as the NAV discount could increase as well.
Liquidity risk
The trading activity (liquidity) on the Nasdaq Baltic Exchange is low relative to most Western European markets. Therefore, it may be hard to buy and sell INVL Technology shares without affecting the share price.
Russia – Ukraine risk
The company has no direct exposure to Russia or Ukraine. However, a general downturn in the economy due to the Russia – Ukraine war can affect the company's sales and profits.
Inflation risk
High inflation is likely to lead to an increase in INVL Technologies' operating expenses, which could affect the margins negatively if the company cannot pass on these costs to the clients.
| April 26, 2023 | INVL Technology |
|---|---|
| Income Statement | 2021 | 2022 | 2023E | 2024E | 2025E |
|---|---|---|---|---|---|
| Net sales | 4.2 | 0.5 | 3.2 | 3.2 | 3.8 |
| Total operating costs | -1.5 | 1.6 | -0.7 | -0.7 | -0.8 |
| EBITDA | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Depreciation & Amort. | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| One-off EBIT items | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| EBIT | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Financial net | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Pre-tax profit | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Taxes | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other items | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net profit | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Balance Sheet | 2021 | 2022 | 2023E | 2024E | 2025E |
| Cash and cash equivalent | 2 | 1 | 5 | 5 | 5 |
| Receivables | 0 | 0 | 0 | 0 | 0 |
| Inventories | 0 | 0 | 0 | 0 | 0 |
| Other current assets | 0 | 1 | 1 | 1 | 1 |
| Total current assets | 2 | 2 | 5 | 5 | 6 |
| Tangible assets | 0 | 0 | 0 | 0 | 0 |
| Goodwill & intangible | 0 | 0 | 0 | 0 | 0 |
| assets | |||||
| Lease & Investment | 0 | 0 | 0 | 0 | 0 |
| properties | |||||
| Long-term Investments | 35 | 35 | 38 | 41 | 45 |
| Associated companies | 0 | 0 | 0 | 0 | 0 |
| Other long-term assets | 1 | 2 | 2 | 2 | 2 |
| Total fixed assets | 37 | 37 | 40 | 43 | 47 |
| Total Assets | 39 | 38 | 45 | 48 | 53 |
| Accounts payable | 0 | 0 | 0 | 0 | 0 |
| Short-term IB debt | 0 | 0 | 4 | 5 | 6 |
| Other current liabilities | 0 | 0 | 0 | 0 | 0 |
| Total current liabilities | 0 | 0 | 5 | 5 | 7 |
| Long-term IB debt | 0 | 0 | 0 | 0 | 0 |
| Convertibles & Lease liab. | 0 | 0 | 0 | 0 | 0 |
| Deferred tax liab. | 0 | 0 | 0 | 0 | 0 |
| Provisions | 0 | 0 | 0 | 0 | 0 |
| Other long-term liab. | 0 | 0 | 0 | 0 | 0 |
| Total long-term liab. | 2 | 0 | 0 | 0 | 0 |
| Total Liabilities | 3 | 0 | 5 | 5 | 7 |
| Minority interest | 0 | 0 | 0 | 0 | 0 |
| Shareholders' equity | 36 | 38 | 41 | 43 | 46 |
| Total liabilities and equity | 39 | 38 | 45 | 48 | 53 |
| Free Cash Flow | 2021 | 2022 | 2023E | 2024E | 2025E |
|---|---|---|---|---|---|
| Operating profit | 2.6 | 2.1 | 2.5 | 2.4 | 3.0 |
| Depreciation & Amort. | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Working capital chg. | 0.6 | -0.9 | 0.0 | 0.0 | 0.0 |
| Other Operating CF items | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Operating Cash Flow | 3.2 | 1.2 | 2.5 | 2.4 | 3.0 |
| Net investments | -3.9 | -0.3 | -3.1 | -3.0 | -3.6 |
| Other items | 0.8 | -2.3 | 0.0 | 0.0 | 0.0 |
| Free Cash Flow | 0.1 | -1.4 | -0.5 | -0.6 | -0.6 |
| Capital structure | 2021 | 2022 | 2023E | 2024E | 2025E |
| Equity ratio | 93.5% | 99.5% | 89.9% | 89.6% | 87.5% |
| Debt / Equity ratio | 0.0% | 0.0% | 10.8% | 11.3% | 13.9% |
| Gearing % | -5.8% | -1.9% | -0.5% | 0.8% | 2.2% |
| Net debt/EBITDA | -0.8 | -0.3 | -0.1 | 0.2 | 0.3 |
| Profitability | 2021 | 2022 | 2023E | 2024E | 2025E |
| ROE | 7.5% | 5.7% | 6.4% | 5.7% | 6.8% |
| FCF yield | 0.4% | -5.4% | -2.1% | -2.4% | -2.6% |
| EBITDA margin | 63.1% | 411.5% | 78.6% | 76.4% | 79.1% |
| EBIT margin | 63.1% | 411.5% | 78.6% | 76.4% | 79.1% |
| PTP margin | 63.1% | 411.5% | 78.6% | 76.4% | 79.1% |
| Net margin | 63.1% | 411.5% | 78.6% | 76.4% | 79.1% |
| Valuation | 2021 | 2022 | 2023E | 2024E | 2025E |
| P/E | 12.6 | 12.3 | 9.6 | 10.1 | 8.1 |
| P/E adjusted P/Sales |
12.6 8.0 |
12.3 50.7 |
9.6 7.5 |
10.1 7.7 |
8.1 6.4 |
| EV/Sales | 7.5 | 49.3 | 7.5 | 7.8 | 6.7 |
| EV/EBITDA | 11.8 | 12.0 | 9.5 | 10.3 | 8.4 |
| EV/EBIT | 11.8 | 12.0 | 9.5 | 10.3 | 8.4 |
| P/BV | 0.9 | 0.7 | 0.6 | 0.6 | 0.5 |
| P/BV tangible | 0.9 | 0.7 | 0.6 | 0.6 | 0.5 |
| Per share ratios | 2021 | 2022 | 2023E | 2024E | 2025E |
| EPS | 0.22 | 0.18 | 0.21 | 0.20 | 0.25 |
| EPS, adjusted | 0.22 | 0.18 | 0.21 | 0.20 | 0.25 |
| Operating CF/share | 0.27 | 0.10 | 0.21 | 0.20 | 0.25 |
| Free Cash Flow/share | 0.01 | -0.12 | -0.04 | -0.05 | -0.05 |
| BV/share | 2.99 | 3.17 | 3.38 | 3.58 | 3.83 |
| Tangible BV/share | 2.99 | 3.17 | 3.38 | 3.58 | 3.83 |
| Div. per share | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Div. payout ratio | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Shareholders | Capital | Votes | |||
| UAB LJB Investments | 4.854 | 19.91 % | |||
| AB Invalda INVL | 3.493 | 14.33 % | |||
| Irena Ona Miseikiene | 2.935 | 12.04 % | |||
| AB Lietuvos draudimas | 1.821 | 7.47 % | |||
| Kazimieras Tonkunas | 1.353 | 5.55 % | |||
| Alvydas Banys | 1.238 | 5.08 % | |||
| Key people | ||
|---|---|---|
| CEO | Kazimieras Tonkunas | |
| CFO | ||
| IR | ||
| Chairman | Kazimieras Tonkunas |
| P/E | EPS | ||
|---|---|---|---|
| Price per share | |||
| Earnings per share | Profit before extraordinary items and taxes – income taxes + | ||
| minority interest | |||
| Number of shares | |||
| P/Sales | Earnings per share DPS |
||
| Market cap | Dividend for financial period per share | ||
| Sales | |||
| P/BV | CEPS | ||
| Price per share | Gross cash flow from operations | ||
| Shareholders' equity + taxed provisions per share | Number of shares | ||
| P/CF Price per share |
EV/Share | ||
| Operating cash flow per share | Enterprise value | ||
| Number of shares | |||
| EV (Enterprise value) | Sales/Share | ||
| Sales | |||
| Market cap + Net debt + Minority interest at market value – share of | Number of shares | ||
| associated companies at market value | |||
| Net debt | EBITDA/Share | ||
| Interest-bearing debt – financial assets | |||
| Earnings before interest, tax, depreciation and amortization | |||
| Number of shares | |||
| EV/Sales | EBIT/Share | ||
| Enterprise value | Operating profit | ||
| Sales | Number of shares | ||
| EV/EBITDA | EAFI/Share | ||
| Enterprise value | Pre-tax profit | ||
| Earnings before interest, tax, depreciation and amortization | Number of shares | ||
| EV/EBIT | Capital employed/Share | ||
| Enterprise value | |||
| Operating profit | Total assets – non-interest-bearing debt | ||
| Number of shares | |||
| Div yield, % | Total assets | ||
| Dividend per share | |||
| Price per share | Balance sheet total | ||
| Payout ratio, % | Interest coverage (x) | ||
| Total dividends | Operating profit | ||
| Earnings before extraordinary items and taxes – income taxes + minority interest | Financial items | ||
| Net cash/Share | Asset turnover (x) | ||
| Turnover | |||
| Financial assets – interest-bearing debt Number of shares |
Balance sheet total (average) | ||
| ROA, % | Debt/Equity, % | ||
| Operating profit + financial income + extraordinary items Balance sheet total – interest-free short-term debt – long-term advances |
Interest-bearing debt Shareholders' equity + minority interest + taxed provisions |
||
| received and accounts payable (average) | |||
| ROCE, % | Equity ratio, % | ||
| Profit before extraordinary items + interest expenses + other financial costs | Shareholders' equity + minority interest + taxed provisions | ||
| Balance sheet total – non-interest-bearing debt (average) | Total assets – interest-free loans | ||
| ROE, % | CAGR, % | ||
| Profit before extraordinary items – income taxes | Cumulative annual growth rate = Average growth rate per year | ||
| Shareholders' equity + minority interest + taxed provisions (average) | |||
Disclaimer
Enlight Research OÜ's main valuation methods are discounted cash flow valuation and peer valuation with common multiples such as Price to Earnings, Enterprise Value to EBITDA, dividend yield etc. Aforementioned methods are used to estimate a company's fair value according to the following three scenarios: Bull (positive), Base (main scenario), and Bear (negative).
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