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CANCOM SE — Regulatory Filings 2013
Oct 29, 2013
71_rns_2013-10-29_c8f970b2-938b-4a96-8d69-968934846fc0.pdf
Regulatory Filings
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CANCOM SE Germany - IT Services
| Buy (old: Buy) | 29-October-13 | |||
|---|---|---|---|---|
| Price target: EUR 32.50 (old: EUR 32.00) |
Tim Wunderlich, CFA Analyst |
|||
| Price: | EUR 27.80 | Next result: | Q3 13: 08.11.13 | |
| Bloomberg: | COK GR | Market cap: | EUR 336.5 m | [email protected] |
| Reuters: | COKG.DE | Enterprise Value: | EUR 298.7 m | Tel.: +49 40 4143885 81 |
Strong FY '13 guidance and fully in-line prelim. Q3 results; Adj. Est. & PT
Q3 figures are fully in line. While Q3 sales rose by 3% yoy to € 142m, EBITDA increased strongly disproportionately by 17% yoy to € 8.0m. This reflects the favourable mix shift towards Cloud Computing. As expected, CANCOM's success in Cloud Computing gradually transforms the P&L structure: While sales growth should be more modest because cloud revenue is allocated over the contract period (usually 60 months), EBITDA is seen to rise dynamically thanks to high EBITDA margins in Cloud Computing of 30%+. Notably, CANCOM achieved a significant yoy increase in EBITDA in Q3 despite up-front costs relating to the implementation of several large Private Cloud solutions.
Most importantly, the first time FY '13 guidance looks strong. CANCOM expects sales of € 590m (+6% yoy) and EBITDA of € 33m (+18% yoy) above our expectation of € 32.1m EBITDA. Notably, for Q4, the FY outlook implies 30% yoy EBITDA growth to € 10.2m against a strong base and a Q4 EBITDA margin of roughly 6.0% (versus 5.2% in Q4 '12). This reflects the sales mix shift towards high-margin and recurring Cloud Computing sales driven by CANCOM's differentiated AHP cloud software solution, which offers cost and speed advantages in the implementation of a Private Cloud solution.
Q3 results underpin that the value-accretive transformation into a Cloud provider is in full swing providing high-margin, recurring revenues. This should be strengthened by the planned, very sensible take-over of Pironet (not included in estimates): By shifting Pironet's top consultants into its Cloud Computing projects, CANCOM should be able to ease its current capacity bottleneck - the only obstacle to even stronger Cloud Computing growth. Hence, Prionet's consultants will immediately work on much more profitable projects. Also, CANCOM is expected to generate total cost savings of € 1.5m relating to synergies in admin and the data centre.
Against this backdrop, the valuation of 6.9x EV/EBITDA '14E looks undemanding: CANCOM remains a BUY with a new PT of € 32.50 (DCF; old: € 32.00). FCFY '15E would imply a fair value of € 37.0. Estimates are slightly adjusted for lower sales growth (reflecting the guidance), higher gross margins (positive), higher PPA amortisation (negative) and lower interest expenses (positive). – continued –
| Y/E 31.12 (EUR m) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Sales | 348.3 | 474.6 | 544.4 | 558.1 | 590.0 | 650.0 | 687.0 |
| Sales growth | 2 % | 36 % | 15 % | 3 % | 6 % | 10 % | 6 % |
| EBITDA | 9.5 | 19.0 | 25.0 | 28.1 | 33.5 | 41.6 | 46.6 |
| EBIT | 7.1 | 15.2 | 18.5 | 20.7 | 24.5 | 31.7 | 36.7 |
| Net income | 5.1 | 7.8 | 11.5 | 11.5 | 16.4 | 21.6 | 25.2 |
| Net debt | -3.5 | -0.9 | -18.5 | -29.2 | -37.9 | -49.1 | -63.5 |
| Net gearing | -8.0 % | -1.8 % | -30.4 % | -36.3 % | -34.5 % | -38.7 % | -43.3 % |
| Net Debt/EBITDA | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| EPS pro forma | 0.48 | 0.92 | 1.14 | 1.06 | 1.34 | 1.77 | 2.07 |
| CPS | 0.80 | 1.28 | 2.18 | 0.89 | 1.33 | 1.67 | 1.98 |
| DPS | 0.15 | 0.15 | 0.30 | 0.35 | 0.40 | 0.45 | 0.50 |
| Dividend yield | 0.5 % | 0.5 % | 1.1 % | 1.3 % | 1.4 % | 1.6 % | 1.8 % |
| Gross profit margin | 31.0 % | 29.3 % | 29.1 % | 29.5 % | 31.7 % | 32.3 % | 32.6 % |
| EBITDA margin | 2.7 % | 4.0 % | 4.6 % | 5.0 % | 5.7 % | 6.4 % | 6.8 % |
| EBIT margin | 2.0 % | 3.2 % | 3.4 % | 3.7 % | 4.1 % | 4.9 % | 5.3 % |
| ROCE | 10.5 % | 19.5 % | 20.6 % | 21.1 % | 21.5 % | 23.5 % | 24.0 % |
| EV/sales | 0.8 | 0.6 | 0.5 | 0.5 | 0.5 | 0.4 | 0.4 |
| EV/EBITDA | 30.0 | 15.0 | 10.7 | 10.2 | 8.9 | 6.9 | 5.9 |
| EV/EBIT | 40.1 | 18.8 | 14.5 | 13.9 | 12.2 | 9.1 | 7.4 |
| PER | 57.8 | 30.2 | 24.3 | 26.1 | 20.7 | 15.7 | 13.4 |
| Adjusted FCF yield | 2.2 % | 4.0 % | 5.9 % | 5.4 % | 6.7 % | 9.0 % | 10.6 % |
Source: Company data, Hauck & Aufhäuser Close price as of: 28.10.2013
Source: Company data, Hauck & Aufhäuser
| High/low 52 weeks: | 27.80 / 11.02 |
|---|---|
| Price/Book Ratio: | 3.1 |
| Relative performance (TecDAX): | |
| 3 months | 2.4 % |
| 6 months | 43.3 % |
| 12 months | 111.9 % |
Changes in estimates
| Sales | EBIT | EPS | ||
|---|---|---|---|---|
| old: | 590.0 | 24.5 | 1.34 | |
| 2013 | ∆ | -2.6% | 3.0% | 2.5% |
| old: | 650.0 | 31.7 | 1.77 | |
| 2014 | ∆ | -4.7% | 1.4% | 0.6% |
| old: | 687.0 | 36.7 | 2.07 | |
| 2015 | ∆ | -4.2% | 1.0% | 1.4% |
Key share data:
| Number of shares: (in m pcs) | 12.2 |
|---|---|
| Authorised capital: (in € m) | 4.0 |
| Book value per share: (in €) | 9.0 |
| Ø trading volume: (12 months) | 60,000 |
Major shareholders:
| Free Float | 82.9 % |
|---|---|
| AGI | 13.3 % |
| Stefan Kober | 2.3 % |
| Klaus Weinmann | 1.6 % |
Company description:
CANCOM is Germany's 3rd largest independent system house operating a scalable eCommerce business.
| EUR | Q3 13 | Q3 13 est |
Q3 12 | yoy | Q2 13 | qoq | 9m 13 | 9m 12 | yoy |
|---|---|---|---|---|---|---|---|---|---|
| Sales | 142.3 | 142.0 | 138.7 | 3% | 140.0 | 2% | 417.5 | 406.8 | 3% |
| EBITDA | 8.0 | 8.0 | 6.8 | 17% | 7.8 | 3% | 22.8 | 20.2 | 13% |
| EBITDA margin | 5.6% | 5.6% | 4.9% | + 0.7 pp | 5.6% | + 0.1 pp | 5.5% | 5.0% | + 0.5 pp |
Financials
| Profit and loss (EUR m) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Net sales | 348.3 | 474.6 | 544.4 | 558.1 | 590.0 | 650.0 | 687.0 |
| Sales growth | 1.6 % | 36.2 % | 14.7 % | 2.5 % | 5.7 % | 10.2 % | 5.7 % |
| Increase/decrease in finished goods and work-in-process | 1.0 | 1.3 | 0.9 | 2.5 | 1.0 | 1.0 | 1.0 |
| Total sales | 349.3 | 475.8 | 545.3 | 560.6 | 591.0 | 651.0 | 688.0 |
| Other operating income | 2.3 | 3.3 | 0.7 | 0.6 | 0.7 | 0.7 | 0.7 |
| Material expenses | 241.1 | 336.3 | 386.6 | 395.1 | 403.8 | 440.9 | 463.6 |
| Personnel expenses | 79.2 | 97.0 | 108.0 | 112.4 | 125.0 | 137.0 | 144.0 |
| Other operating expenses | 21.8 | 26.8 | 26.4 | 25.8 | 29.4 | 32.2 | 34.5 |
| Total operating expenses | 339.8 | 456.8 | 520.3 | 532.5 | 557.5 | 609.5 | 641.5 |
| EBITDA | 9.5 | 19.0 | 25.0 | 28.1 | 33.5 | 41.6 | 46.6 |
| Depreciation | 2.4 | 3.8 | 2.8 | 4.0 | 4.8 | 5.0 | 5.2 |
| EBITA | 7.1 | 15.2 | 22.2 | 24.0 | 28.7 | 36.6 | 41.4 |
| Amortisation of goodwill | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Amortisation of intangible assets | 0.0 | 0.0 | 3.7 | 3.4 | 4.2 | 4.9 | 4.6 |
| Impairment charges | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| EBIT | 7.1 | 15.2 | 18.5 | 20.7 | 24.5 | 31.7 | 36.7 |
| Interest income | 0.2 | 0.1 | 0.3 | 0.4 | 0.4 | 0.4 | 0.5 |
| Interest expenses | 1.3 | 1.9 | 2.2 | 2.1 | 1.2 | 1.0 | 1.0 |
| Other financial result | 0.0 | 0.0 | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 |
| Financial result | -1.1 | -1.8 | -1.6 | -1.8 | -0.8 | -0.5 | -0.4 |
| Recurring pretax income from continuing operations | 5.9 | 13.3 | 16.9 | 18.9 | 23.7 | 31.1 | 36.3 |
| Extraordinary income/loss | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Earnings before taxes | 5.9 | 13.3 | 16.9 | 18.9 | 23.7 | 31.1 | 36.3 |
| Taxes | 0.9 | 3.7 | 4.9 | 6.6 | 7.1 | 9.3 | 10.9 |
| Net income from continuing operations | 5.0 | 9.6 | 12.0 | 12.3 | 16.6 | 21.8 | 25.4 |
| Result from discontinued operations (net of tax) | -0.1 | 1.7 | 0.3 | 0.7 | 0.0 | 0.0 | 0.0 |
| Net income | 5.1 | 7.9 | 11.7 | 11.6 | 16.6 | 21.8 | 25.4 |
| Minority interest | 0.0 | 0.1 | 0.2 | 0.1 | 0.2 | 0.2 | 0.2 |
| Net income (net of minority interest) | 5.1 | 7.8 | 11.5 | 11.5 | 16.4 | 21.6 | 25.2 |
| Average number of shares | 10.4 | 10.3 | 10.4 | 10.6 | 12.2 | 12.2 | 12.2 |
| EPS reported | 0.49 | 0.76 | 1.11 | 1.09 | 1.34 | 1.77 | 2.07 |
| Profit and loss (common size) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Net sales | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % |
| Increase/decrease in finished goods and work-in-process | 0.3 % | 0.3 % | 0.2 % | 0.5 % | 0.2 % | 0.2 % | 0.1 % |
| Total sales | 100.3 % | 100.3 % | 100.2 % | 100.5 % | 100.2 % | 100.2 % | 100.1 % |
| Other operating income | 0.6 % | 0.7 % | 0.1 % | 0.1 % | 0.1 % | 0.1 % | 0.1 % |
| Material expenses | 69.2 % | 70.9 % | 71.0 % | 70.8 % | 68.4 % | 67.8 % | 67.5 % |
| Personnel expenses | 22.7 % | 20.4 % | 19.8 % | 20.1 % | 21.2 % | 21.1 % | 21.0 % |
| Other operating expenses | 6.3 % | 5.7 % | 4.8 % | 4.6 % | 5.0 % | 5.0 % | 5.0 % |
| Total operating expenses | 97.6 % | 96.3 % | 95.6 % | 95.4 % | 94.5 % | 93.8 % | 93.4 % |
| EBITDA | 2.7 % | 4.0 % | 4.6 % | 5.0 % | 5.7 % | 6.4 % | 6.8 % |
| Depreciation | 0.7 % | 0.8 % | 0.5 % | 0.7 % | 0.8 % | 0.8 % | 0.8 % |
| EBITA | 2.0 % | 3.2 % | 4.1 % | 4.3 % | 4.9 % | 5.6 % | 6.0 % |
| Amortisation of goodwill | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % |
| Amortisation of intangible assets | 0.0 % | 0.0 % | 0.7 % | 0.6 % | 0.7 % | 0.8 % | 0.7 % |
| Impairment charges | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % |
| EBIT | 2.0 % | 3.2 % | 3.4 % | 3.7 % | 4.1 % | 4.9 % | 5.3 % |
| Interest income | 0.0 % | 0.0 % | 0.1 % | 0.1 % | 0.1 % | 0.1 % | 0.1 % |
| Interest expenses | 0.4 % | 0.4 % | 0.4 % | 0.4 % | 0.2 % | 0.2 % | 0.1 % |
| Other financial result | 0.0 % | 0.0 % | 0.1 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % |
| Financial result | -0.3 % | -0.4 % | -0.3 % | -0.3 % | -0.1 % | -0.1 % | -0.1 % |
| Recurring pretax income from continuing operations | 1.7 % | 2.8 % | 3.1 % | 3.4 % | 4.0 % | 4.8 % | 5.3 % |
| Extraordinary income/loss | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % |
| Earnings before taxes | 1.7 % | 2.8 % | 3.1 % | 3.4 % | 4.0 % | 4.8 % | 5.3 % |
| Tax rate | 15.6 % | 28.1 % | 28.8 % | 35.0 % | 30.0 % | 30.0 % | 30.0 % |
| Net income from continuing operations | 1.4 % | 2.0 % | 2.2 % | 2.2 % | 2.8 % | 3.3 % | 3.7 % |
| Income from discontinued operations (net of tax) | 0.0 % | 0.4 % | 0.1 % | 0.1 % | 0.0 % | 0.0 % | 0.0 % |
| Net income | 1.5 % | 1.7 % | 2.1 % | 2.1 % | 2.8 % | 3.3 % | 3.7 % |
| Minority interest | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % | 0.0 % |
| Net income (net of minority interest) | 1.5 % | 1.6 % | 2.1 % | 2.1 % | 2.8 % | 3.3 % | 3.7 % |
| Balance sheet (EUR m) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Intangible assets | 31.5 | 42.5 | 39.6 | 41.2 | 57.0 | 55.1 | 53.5 |
| Property, plant and equipment | 6.5 | 9.7 | 12.9 | 17.6 | 19.6 | 22.6 | 25.7 |
| Financial assets | 0.2 | 3.2 | 2.2 | 5.0 | 5.0 | 5.0 | 5.0 |
| FIXED ASSETS | 38.2 | 55.4 | 54.6 | 63.8 | 81.7 | 82.8 | 84.3 |
| Inventories | 12.6 | 13.4 | 15.0 | 8.7 | 11.8 | 13.5 | 14.9 |
| Accounts receivable | 47.2 | 68.0 | 72.2 | 88.3 | 92.1 | 103.3 | 111.0 |
| Other current assets | 5.1 | 6.4 | 7.2 | 0.9 | 0.9 | 0.9 | 0.9 |
| Liquid assets | 25.8 | 31.5 | 44.4 | 44.6 | 48.8 | 60.0 | 74.4 |
| Deferred taxes | 2.6 | 0.7 | 0.6 | 1.1 | 1.1 | 1.1 | 1.1 |
| Deferred charges and prepaid expenses | 3.4 | 2.0 | 0.9 | 1.1 | 1.1 | 1.1 | 1.1 |
| CURRENT ASSETS | 96.7 | 122.0 | 140.2 | 144.8 | 155.9 | 180.0 | 203.5 |
| TOTAL ASSETS | 134.9 | 177.4 | 194.9 | 208.6 | 237.6 | 262.8 | 287.8 |
| SHAREHOLDERS EQUITY | 43.9 | 50.9 | 60.7 | 80.6 | 110.0 | 126.7 | 146.5 |
| MINORITY INTEREST | 0.0 | 0.1 | 0.2 | 0.2 | 0.4 | 0.6 | 0.8 |
| Long-term debt | 21.6 | 29.0 | 16.7 | 14.1 | 6.4 | 6.4 | 6.4 |
| Provisions for pensions and similar obligations | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Other provisions | 4.3 | 3.2 | 7.6 | 5.1 | 5.1 | 5.1 | 5.1 |
| Non-current liabilities | 26.0 | 32.2 | 24.4 | 19.3 | 11.6 | 11.6 | 11.6 |
| short-term liabilities to banks | 0.7 | 1.6 | 9.1 | 1.3 | 4.5 | 4.5 | 4.5 |
| Accounts payable | 47.9 | 64.4 | 72.9 | 76.9 | 80.8 | 89.0 | 94.1 |
| Advance payments received on orders | 1.1 | 1.5 | 1.9 | 3.6 | 3.6 | 3.6 | 3.6 |
| Other liabilities (incl. from lease and rental contracts) | 10.7 | 16.3 | 17.4 | 18.8 | 18.8 | 18.8 | 18.8 |
| Deferred taxes | 2.0 | 4.3 | 2.7 | 2.8 | 2.8 | 2.8 | 2.8 |
| Deferred income | 2.7 | 6.0 | 5.6 | 5.1 | 5.1 | 5.1 | 5.1 |
| Current liabilities | 65.0 | 94.2 | 109.6 | 108.6 | 115.6 | 123.9 | 128.9 |
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 134.9 | 177.4 | 194.9 | 208.6 | 237.6 | 262.8 | 287.8 |
| Balance sheet (common size) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Intangible assets | 23.4 % | 24.0 % | 20.3 % | 19.8 % | 24.0 % | 21.0 % | 18.6 % |
| Property, plant and equipment | 4.8 % | 5.5 % | 6.6 % | 8.4 % | 8.3 % | 8.6 % | 8.9 % |
| Financial assets | 0.1 % | 1.8 % | 1.1 % | 2.4 % | 2.1 % | 1.9 % | 1.7 % |
| FIXED ASSETS | 28.3 % | 31.2 % | 28.0 % | 30.6 % | 34.4 % | 31.5 % | 29.3 % |
| Inventories | 9.3 % | 7.5 % | 7.7 % | 4.2 % | 5.0 % | 5.2 % | 5.2 % |
| Accounts receivable | 35.0 % | 38.3 % | 37.1 % | 42.3 % | 38.8 % | 39.3 % | 38.6 % |
| Other current assets | 3.8 % | 3.6 % | 3.7 % | 0.4 % | 0.4 % | 0.3 % | 0.3 % |
| Liquid assets | 19.2 % | 17.7 % | 22.8 % | 21.4 % | 20.5 % | 22.8 % | 25.8 % |
| Deferred taxes | 1.9 % | 0.4 % | 0.3 % | 0.5 % | 0.5 % | 0.4 % | 0.4 % |
| Deferred charges and prepaid expenses | 2.5 % | 1.1 % | 0.4 % | 0.5 % | 0.5 % | 0.4 % | 0.4 % |
| CURRENT ASSETS | 71.7 % | 68.8 % | 72.0 % | 69.4 % | 65.6 % | 68.5 % | 70.7 % |
| TOTAL ASSETS | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % |
| SHAREHOLDERS EQUITY | 32.5 % | 28.7 % | 31.2 % | 38.6 % | 46.3 % | 48.2 % | 50.9 % |
| MINORITY INTEREST | 0.0 % | 0.0 % | 0.1 % | 0.1 % | 0.2 % | 0.2 % | 0.3 % |
| Long-term debt | 16.0 % | 16.3 % | 8.6 % | 6.8 % | 2.7 % | 2.4 % | 2.2 % |
| Provisions for pensions and similar obligations | 0.0 % | 0.0 % | 0.0 % | 0.1 % | 0.1 % | 0.0 % | 0.0 % |
| Other provisions | 3.2 % | 1.8 % | 3.9 % | 2.4 % | 2.1 % | 1.9 % | 1.8 % |
| Non-current liabilities | 19.3 % | 18.2 % | 12.5 % | 9.3 % | 4.9 % | 4.4 % | 4.0 % |
| short-term liabilities to banks | 0.5 % | 0.9 % | 4.7 % | 0.6 % | 1.9 % | 1.7 % | 1.6 % |
| Accounts payable | 35.5 % | 36.3 % | 37.4 % | 36.9 % | 34.0 % | 33.9 % | 32.7 % |
| Advance payments received on orders | 0.8 % | 0.9 % | 1.0 % | 1.7 % | 1.5 % | 1.4 % | 1.3 % |
| Other liabilities (incl. from lease and rental contracts) | 7.9 % | 9.2 % | 9.0 % | 9.0 % | 7.9 % | 7.1 % | 6.5 % |
| Deferred taxes | 1.5 % | 2.4 % | 1.4 % | 1.4 % | 1.2 % | 1.1 % | 1.0 % |
| Deferred income | 2.0 % | 3.4 % | 2.9 % | 2.4 % | 2.1 % | 1.9 % | 1.8 % |
| Current liabilities | 48.2 % | 53.1 % | 56.2 % | 52.0 % | 48.7 % | 47.1 % | 44.8 % |
| TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % |
| Cash flow statement (EUR m) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| Net profit/loss | 5.1 | 7.9 | 11.7 | 11.6 | 16.6 | 21.8 | 25.4 |
| Depreciation of fixed assets (incl. leases) | 2.4 | 3.8 | 2.8 | 4.0 | 4.8 | 5.0 | 5.2 |
| Amortisation of goodwill | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Amortisation of intangible assets | 0.0 | 0.0 | 3.7 | 3.4 | 4.2 | 4.9 | 4.6 |
| Others | -0.6 | 3.0 | 4.7 | 2.9 | 0.0 | 0.0 | 0.0 |
| Cash flow from operations before changes in w/c | 6.9 | 14.7 | 22.9 | 21.9 | 25.6 | 31.7 | 35.2 |
| Increase/decrease in inventory | -0.9 | 0.3 | -6.3 | 6.2 | -3.1 | -1.7 | -1.4 |
| Increase/decrease in accounts receivable | 0.8 | -15.2 | -5.2 | -16.1 | -3.9 | -11.2 | -7.8 |
| Increase/decrease in accounts payable | 2.7 | 17.1 | 15.3 | 4.0 | 3.9 | 8.2 | 5.1 |
| Increase/decrease in other working capital positions | 1.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Increase/decrease in working capital | 3.8 | 2.2 | 3.8 | -5.8 | -3.0 | -4.7 | -4.1 |
| Cash flow from operating activities | 10.7 | 16.9 | 26.7 | 16.1 | 22.6 | 27.0 | 31.1 |
| CAPEX | 4.7 | 8.1 | 9.4 | 12.5 | 9.9 | 11.0 | 11.3 |
| Payments for acquisitions | 0.4 | 10.5 | 3.6 | 0.1 | 0.0 | 0.0 | 0.0 |
| Financial investments | -0.2 | -0.1 | -0.3 | 0.0 | 0.0 | 0.0 | 0.0 |
| Income from asset disposals | 2.3 | 1.1 | 4.8 | 2.0 | 0.0 | 0.0 | 0.0 |
| Cash flow from investing activities | -2.6 | -17.3 | -7.9 | -10.6 | -9.9 | -11.0 | -11.3 |
| Cash flow before financing | 8.0 | -0.4 | 18.8 | 5.5 | 12.7 | 16.0 | 19.8 |
| Increase/decrease in debt position | 0.1 | 8.1 | -2.6 | -11.9 | -4.5 | 0.0 | 0.0 |
| Purchase of own shares | 0.2 | -0.6 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Capital measures | 0.0 | 0.0 | 0.0 | 11.2 | 0.0 | 0.0 | 0.0 |
| Dividends paid | 0.0 | 1.5 | 1.6 | 3.3 | 4.0 | 4.8 | 5.4 |
| Others | -1.0 | -1.3 | -1.6 | -1.4 | 0.0 | 0.0 | 0.0 |
| Effects of exchange rate changes on cash | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash flow from financing activities | -1.1 | 5.9 | -5.8 | -5.3 | -8.5 | -4.8 | -5.4 |
| Increase/decrease in liquid assets | 7.0 | 5.6 | 13.0 | 0.2 | 4.2 | 11.2 | 14.4 |
| Liquid assets at end of period | 25.8 | 31.5 | 44.5 | 44.6 | 48.8 | 60.0 | 74.4 |
Source: Company data, Hauck & Aufhäuser
| 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|
| 386.1 | 441.7 | 502.0 | 529.1 | 560.5 | 618.2 | 654.0 |
| 19.8 % | 14.4 % | 13.7 % | 5.4 % | 5.9 % | 10.3 % | 5.8 % |
| 36.4 | 32.9 | 42.4 | 29.0 | 29.5 | 31.9 | 33.0 |
| n/a | -9.6 % | 28.9 % | -31.7 % | 1.9 % | 8.0 % | 3.5 % |
| 0.0 | n/a | n/a | n/a | n/a | n/a | n/a |
| n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| 0.0 | n/a | n/a | n/a | n/a | n/a | n/a |
| n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| 0.0 | n/a | n/a | n/a | n/a | n/a | n/a |
| n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| 422.5 | 474.6 | 544.4 | 558.1 | 590.0 | 650.0 | 687.0 |
| 31.1 % | 12.3 % | 14.7 % | 2.5 % | 5.7 % | 10.2 % | 5.7 % |
| Key ratios (EUR m) | 2009 | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E |
|---|---|---|---|---|---|---|---|
| P&L growth analysis | |||||||
| Sales growth | 1.6 % | 36.2 % | 14.7 % | 2.5 % | 5.7 % | 10.2 % | 5.7 % |
| EBITDA growth | 21.3 % | 100.7 % | 31.6 % | 12.2 % | 19.4 % | 24.0 % | 12.0 % |
| EBIT growth | 26.0 % | 114.0 % | 21.7 % | 12.0 % | 18.5 % | 29.3 % | 16.1 % |
| EPS growth | 87.8 % | 55.5 % | 46.4 % | -2.1 % | 23.8 % | 31.7 % | 16.8 % |
| Efficiency | |||||||
| Total operating costs / sales | 97.6 % | 96.3 % | 95.6 % | 95.4 % | 94.5 % | 93.8 % | 93.4 % |
| Sales per employee | 196.0 | 257.7 | 273.1 | 270.9 | 277.9 | 292.8 | 296.8 |
| EBITDA per employee | 5.3 | 10.3 | 12.5 | 13.6 | 15.8 | 18.7 | 20.1 |
| Balance sheet analysis | |||||||
| Avg. working capital / sales | 3.4 % | 2.8 % | 2.6 % | 2.6 % | 3.0 % | 3.4 % | 3.8 % |
| Inventory turnover (sales/inventory) | 27.7 | 35.5 | 36.3 | 63.8 | 50.0 | 48.0 | 46.0 |
| Trade debtors in days of sales | 49.5 | 52.3 | 48.4 | 57.7 | 57.0 | 58.0 | 59.0 |
| A/P turnover [(A/P*365)/sales] | 50.1 | 49.6 | 48.9 | 50.3 | 50.0 | 50.0 | 50.0 |
| Cash conversion cycle (days) | -3.9 | -3.1 | -6.3 | -5.3 | -5.4 | -4.5 | -3.3 |
| Cash flow analysis | |||||||
| Free cash flow | 6.0 | 8.8 | 17.3 | 3.6 | 12.7 | 16.0 | 19.8 |
| Free cash flow/sales | 1.7 % | 1.9 % | 3.2 % | 0.6 % | 2.1 % | 2.5 % | 2.9 % |
| FCF / net profit | 118.4 % | 113.1 % | 150.3 % | 31.4 % | 77.4 % | 74.2 % | 78.7 % |
| FCF yield | 2.1 % | 3.1 % | 6.1 % | 1.1 % | 3.8 % | 4.8 % | 5.9 % |
| Capex / depn | 188.4 % | 206.6 % | 139.0 % | 169.0 % | 109.7 % | 111.1 % | 115.3 % |
| Capex / maintenance capex | 137.6 % | 133.1 % | 151.6 % | n/a | 106.2 % | 117.6 % | 116.9 % |
| Capex / sales | 1.3 % | 1.7 % | 1.7 % | n/a | n/a | n/a | n/a |
| Security | |||||||
| Net debt | -3.5 | -0.9 | -18.5 | -29.2 | -37.9 | -49.1 | -63.5 |
| Net Debt/EBITDA | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net debt / equity | -0.1 | 0.0 | -0.3 | -0.4 | -0.3 | -0.4 | -0.4 |
| Interest cover | 5.4 | 8.0 | 8.3 | 9.7 | 20.7 | 32.3 | 37.5 |
| Dividend payout ratio | 30.7 % | 19.7 % | 26.7 % | 34.7 % | 29.6 % | 25.3 % | 24.0 % |
| Asset utilisation | |||||||
| Capital employed turnover | 4.9 | 5.6 | 5.8 | 5.5 | 4.7 | 4.5 | 4.2 |
| Operating assets turnover | 20.1 | 18.9 | 21.5 | 16.4 | 15.1 | 13.9 | 12.7 |
| Plant turnover | 53.4 | 49.0 | 42.2 | 31.8 | 30.1 | 28.7 | 26.7 |
| Inventory turnover (sales/inventory) | 27.7 | 35.5 | 36.3 | 63.8 | 50.0 | 48.0 | 46.0 |
| Returns | |||||||
| ROCE | 10.5 % | 19.5 % | 20.6 % | 21.1 % | 21.5 % | 23.5 % | 24.0 % |
| ROE | 11.5 % | 15.4 % | 19.0 % | 14.2 % | 14.9 % | 17.0 % | 17.2 % |
| Other | |||||||
| Interest paid / avg. debt | 5.9 % | 7.2 % | 7.9 % | 10.3 % | 9.0 % | 9.0 % | 9.0 % |
| No. employees (average) | 1777 | 1842 | 1994 | 2060 | 2123 | 2220 | 2315 |
| Number of shares | 10.4 | 10.3 | 10.4 | 10.6 | 12.2 | 12.2 | 12.2 |
| DPS | 0.2 | 0.2 | 0.3 | 0.4 | 0.4 | 0.5 | 0.5 |
| EPS reported | 0.49 | 0.76 | 1.11 | 1.09 | 1.34 | 1.77 | 2.07 |
| Valuation ratios | |||||||
| P/BV | 6.6 | 5.6 | 4.8 | 3.9 | 3.1 | 2.7 | 2.3 |
| EV/sales | 0.8 | 0.6 | 0.5 | 0.5 | 0.5 | 0.4 | 0.4 |
| EV/EBITDA | 30.0 | 15.0 | 10.7 | 10.2 | 8.9 | 6.9 | 5.9 |
| EV/EBITA | 40.1 | 18.8 | 12.0 | 11.9 | 10.4 | 7.9 | 6.6 |
| EV/EBIT | 40.1 | 18.8 | 14.5 | 13.9 | 12.2 | 9.1 | 7.4 |
| EV/FCF | 47.4 | 32.2 | 15.4 | 79.6 | 23.6 | 18.0 | 13.8 |
| Dividend yield | 0.5 % | 0.5 % | 1.1 % | 1.3 % | 1.4 % | 1.6 % | 1.8 % |
Disclosures regarding research publications of Hauck & Aufhäuser Institutional Research AG pursuant to section 34b of the German Securities Trading Act (WpHG) and the regulations of the German Financial Analysis Ordinance (FinAnV)
Pursuant to section 34b of the German Securities Trading Act (WpHG) and section 5 of the Financial Analysis Ordinance (FinAnV) a research report has to point out possible conflicts of interest in connection with the analysed company. A conflict of interest is presumed to exist in particular if Hauck & Aufhäuser Institutional Research AG
- (1) or its affiliate(s) was, within the past twelve months, a member in a consortium that acquired the financial instruments of the analysed company,
- (2) has entered into an agreement on the production of the research report with the analysed company,
- (3) or its affiliate(s) has, within the past twelve months, been party to an agreement on the provision of investment banking services with the analysed company or have received services or a promise of services under the term of such an agreement,
- (4) or its affiliate(s) holds 5% or more of the share capital of the analysed company,
- (5) or its affiliate(s) regularly holds a trading position in shares of the analysed company or derivatives thereof,
- (6) or its affiliate(s) manages the financial instruments of the analysed company on the basis of an existing contractual relationship,
- (7) or the analyst has any other significant financial interests relating to the analysed company such as, for example, exercising mandates in the interest of the analysed company.
- (8) The research report has been made available to the company prior to its publication. Thereafter, only factual changes have been made to the report.
Conflicts of interest that existed at the time when this research report was published:
| Company | Disclosure |
|---|---|
| CANCOM SE | 2, 3, 5, 7 |
| Buy | 60.58 % | 100.00 % |
|---|---|---|
| Sell | 18.27 % | 0.00 % |
| Hold | 21.15 % | 0.00 % |
1. General Information/Liabilities
This research report has been produced for the information purposes of institutional investors only, and is not in any way a recommendation, offer or solicitation to buy or sell the financial instruments mentioned herein. The document is confidential and is made available by Hauck & Aufhäuser Institutional Research AG (the ʺCompanyʺ), a majority-owned subsidiary of Hauck & Aufhäuser Privatbankiers KGaA, exclusively to selected recipients [in DE, GB, FR, CH, US, Scandinavia, and Benelux or, in individual cases, also in other countries]. A distribution to private investors in the sense of the German Securities Trading Act (WpHG) is excluded. It is not allowed to pass the research report on to persons other than the intended recipient without the permission of the Company. Reproduction of this document, in whole or in part, is not permitted without prior permission of the Company. All rights reserved.
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Past performance of a financial instrument is not necessarily indicative of future performance.
2. Responsibilities
This research report was prepared by the research analyst named on the front page (the ʺProducerʺ). The Producer is solely responsible for the views and estimates expressed in this report. The report has been prepared independently, i.e. the content of which was not independently examined by the Company or Hauck & Aufhäuser Privatbankiers KGaA.
The estimates and views in this financial report may deviate from those of Hauck & Aufhäuser Privatbankiers KGaA.
The content of the research report was not influenced by the issuer of the analysed financial instrument at any time. It may be possible that parts of the research report were handed out to the issuer for information purposes prior to the publication without any major amendments being made thereafter.
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The Company and Hauck & Aufhäuser Privatbankiers KGaA took internal organisational and regulative precautions to avoid or accordingly disclose possible conflicts of interest in connection with the preparation and distribution of the research report. All members of the Company involved in the preparation of the research report are subject to internal compliance regulations.
No part of the Producer's compensation is directly or indirectly related to the preparation of this financial analysis.
4. Information Concerning the Methods of Valuation/Update
The determination of the fair value per share, i.e. the price target, and the resultant recommendation is done on the basis of the adjusted free cash flow (adj. FCF) method and on the basis of the discounted cash flow – DCF model. Furthermore, a peer group comparison is made.
The adj. FCF method is based on the assumption that investors purchase assets only at a price (enterprise value) at which the operating cash flow return after taxes on this investment exceeds their opportunity costs in the form of a hurdle rate of 7.5%. The operating cash flow is calculated as EBITDA less maintenance capex and taxes.
Within the framework of the DCF approach, the future free cash flows are calculated initially on the basis of a fictitious capital structure of 100% equity, i.e. interest and repayments on debt capital are not factored in initially. The adjustment towards the actual capital structure is done by discounting the calculated free cash flows with the weighted average cost of capital (WACC), which takes into account both the cost of equity capital and the cost of debt. After discounting, the calculated total enterprise value is reduced by the interest-bearing debt capital in order to arrive at the equity value.
Hauck & Aufhäuser Institutional Research uses the following three-step rating system for the analysed companies:
Buy: Sustainable upside potential of more than 10% within 12 months Sell: Sustainable downside potential of more than 10% within 12 months. Hold: Upside/downside potential is limited. No immediate catalyst visible.
NB: The recommendations of Hauck & Aufhäuser Institutional Research are not based on a performance that is expected to be "relative" to the market.
The decision on the choice of the financial instruments analysed in this document was solely made by the Company. The opinions and estimates in this research report are subject to change without notice. It is within the discretion of the Company whether and when it publishes an update to this research report.
5. Major Sources of Information
Part of the information required for this research report was made available by the issuer of the financial instrument. Furthermore, this report is based on publicly available sources (such as, for example, Bloomberg, Reuters, VWD-Trader and the relevant daily press) believed to be reliable. The Company has checked the information for plausibility but not for accuracy or completeness.
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