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CANCOM SE — Regulatory Filings 2014
May 8, 2014
71_rns_2014-05-08_53bc97a9-6d32-4bce-a991-dddda9a59e44.pdf
Regulatory Filings
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CANCOM
(TecDAX, Software/IT)
| Value Indicators: | EUR | Share data: | Description: | ||||
|---|---|---|---|---|---|---|---|
| Buy | DCF: | 43.10 | Bloomberg: | COK GR | One of the three largest independent | ||
| FCF-Value Potential 16e: | 40.00 | Reuters: | COKG | system houses in Germany | |||
| EUR 43.00 | ISIN: | DE0005419105 | |||||
| Market Snapshot: | EUR m | Shareholders: | Risk Profile (WRe): | 2014e | |||
| Market cap: | 513.2 | Freefloat | 96.0 % | Beta: | 1.2 | ||
| Price | EUR 35.11 | No. of shares (m): | 14.6 | Klaus Weinmann (CEO) | 2.0 % | Price / Book: | 2.9 x |
| Upside | 22.5 % | EV: | 473.3 | S. Kober (Superv. Board) | 2.0 % | Equity Ratio: | 47 % |
| Freefloat MC: | 492.6 | Net Fin. Debt / EBITDA: | -0.8 x | ||||
| Ø Trad. Vol. (30d; EUR): | 5.26 m | Net Debt / EBITDA: | -0.8 x |
Preview: New segment reporting should increase transparency
Final Q1; Tuesday, May 13
| Expected Figures Q1/2014: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Figures in EUR m | Q1/14e | Q1/13 | yoy | 2014e | 2013 | yoy | |||
| Sales | 185.4 | 135.1 | 37.2% | 780.0 | 613.8 | 27.1% | |||
| EBITDA | 10.1 | 7.0 | 44.5% | 51.5 | 33.4 | 54.2% | |||
| margin | 5.4% | 5.2% | 6.6% | 5.4% | |||||
| EBIT | 4.1 | 4.8 | -15.4% | 30.5 | 22.6 | 34.6% | |||
| margin | 2.2% | 3.6% | 3.9% | 3.7% | |||||
| EBIT adjusted | 7.0 | 5.1 | 36.9% | 42.4 | 22.6 | 87.0% | |||
| margin | 3.8% | 3.8% | 5.4% | 3.7% | |||||
| EPS | 0.17 | 0.28 | -39.3% | 1.38 | 1.23 | 12.2% | |||
| margin | 0.1% | 0.2% | 0.2% | 0.2% | |||||
| EPS adjusted | 0.31 | 0.30 | 3.3% | 1.94 | 1.23 | 57.7% |
CANCOM is scheduled to release final figures on May 13. Preliminary revenues and (adj.) EBITDA have already been announced.
- EPS as well as IFRS-EBIT are mainly the last unknown figures and will be negatively impacted by PPA-related amortisations. We gauge that these amounted to approx. EUR 2.5m.
- Along with the final figures, CANCOM will introduce new segment reporting which will display cloud-related revenues separately. Given the recurring nature of these revenues and their typically higher margins, investors are willing to pay higher multiples for this part of the business compared to CANCOM's original IT system house business.
- Continued margin expansion reflects a higher share of AHP Private Cloud projects as well as more services revenues.
- Given the intact course of growth and the promising cloud opportunities, which should receive an additional boost from the recently announced cooperation with HP, the Buy rating is being confirmed.
| FY End: 31.12. in EUR m |
CAGR (13-16e) |
2010 | 2011 | 2012 | 2013 | 2014e | 2015e | 2016e | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 12.8 % | 474.6 | 544.4 | 558.1 | 613.8 | 780.0 | 830.0 | 880.0 | ||
| Change Sales yoy | 12.3 % | 14.7 % | 2.5 % | 10.0 % | 27.1 % | 6.4 % | 6.0 % | |||
| Gross profit margin | 29.4 % | 29.1 % | 29.7 % | 30.2 % | 31.2 % | 30.8 % | 30.8 % | |||
| EBITDA | 27.9 % | 19.0 | 25.0 | 28.1 | 33.4 | 51.5 | 63.7 | 69.8 | ||
| Margin | 4.0 % | 4.6 % | 5.0 % | 5.4 % | 6.6 % | 7.7 % | 7.9 % | |||
| EBIT adj. | 37.8 % | 15.2 | 18.5 | 20.7 | 22.6 | 42.4 | 53.4 | 59.3 | ||
| EBIT | 32.6 % | 15.2 | 18.5 | 20.7 | 22.6 | 30.5 | 44.9 | 52.8 | ||
| Margin | 3.2 % | 3.4 % | 3.7 % | 3.7 % | 3.9 % | 5.4 % | 6.0 % | |||
| Net income | 35.0 % | 7.8 | 11.5 | 11.5 | 14.5 | 20.2 | 30.3 | 35.8 | ||
| EPS | 24.8 % | 0.76 | 1.11 | 1.09 | 1.23 | 1.38 | 2.03 | 2.39 | ||
| DPS | 14.5 % | 0.15 | 0.30 | 0.35 | 0.40 | 0.45 | 0.50 | 0.60 | ||
| Rel. Performance vs TecDAX: | Dividend Yield | 2.2 % | 3.4 % | 2.9 % | 2.0 % | 1.3 % | 1.4 % | 1.7 % | ||
| FCFPS | 0.86 | 1.67 | 0.34 | 0.94 | 2.64 | 2.69 | 2.65 | |||
| 1 month: | 13.9 % | EV / Sales | 0.1 x | 0.1 x | 0.2 x | 0.3 x | 0.6 x | 0.6 x | 0.5 x | |
| 6 months: | 11.7 % | EV / EBITDA | 3.7 x | 2.9 x | 3.5 x | 5.2 x | 9.2 x | 7.2 x | 6.2 x | |
| Year to date: | 8.9 % | EV / EBIT | 4.6 x | 3.9 x | 4.7 x | 7.7 x | 15.5 x | 10.3 x | 8.2 x | |
| EV / EBIT adj. | 4.6 x | 3.9 x | 4.7 x | 7.7 x | 11.2 x | 8.6 x | 7.3 x | |||
| Trailing 12 months: | 78.3 % | P / E | 9.0 x | 8.0 x | 11.0 x | 16.4 x | 25.4 x | 17.3 x | 14.7 x | |
| Company events: | FCF Yield Potential | 9.1 % | 15.7 % | 9.8 % | 10.9 % | 5.2 % | 8.9 % | 10.3 % | ||
| 13.05.14 | Q1 | Net Debt | -0.8 | -20.5 | -29.1 | -62.4 | -39.9 | -71.0 | -97.6 | |
| 25.06.14 | AGM | ROE | 16.5 % | 20.6 % | 16.2 % | 11.9 % | 12.5 % | 17.7 % | 18.4 % | |
| 07.08.14 | Q2 | ROCE (NOPAT) | 24.1 % | 29.0 % | 29.1 % | 20.1 % | 17.8 % | 23.6 % | 29.1 % | |
| 11.11.14 | Q3 | Guidance: | 2014: EBITDA EUR 50m |
Andreas Wolf [email protected] +49 40 309537-140
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This research report was prepared by the Warburg Research GmbH, a subsidiary of the M.M.Warburg & CO KGaA and is passed on by the M.M.Warburg & CO KGaA. It contains selected information and does not purport to be complete. The report is based on publicly available information and data ("the information") believed to be accurate and complete. Warburg Research GmbH neither does examine the information to be accurate and complete, nor guarantees its accuracy and completeness. Possible errors or incompleteness of the information do not constitute grounds for liability of M.M.Warburg & CO KGaA or Warburg Research GmbH for damages of any kind whatsoever, and M.M.Warburg & CO KGaA and Warburg Research GmbH are not liable for indirect and/or direct and/or consequential damages. In particular, neither M.M.Warburg & CO KGaA nor Warburg Research GmbH are liable for the statements, plans or other details contained in these analyses concerning the examined companies, their affiliated companies, strategies, economic situations, market and competitive situations, regulatory environment, etc. Although due care has been taken in compiling this research report, it cannot be excluded that it is incomplete or contains errors. M.M.Warburg & CO KGaA and Warburg Research GmbH, their shareholders and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions derived from the information contained in this document. Provided a research report is being transmitted in connection with an existing contractual relationship, i.e. financial advisory or similar services, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH shall be restricted to gross negligence and wilful misconduct. In case of failure in essential tasks, M.M.Warburg & CO KGaA and Warburg Research GmbH are liable for normal negligence. In any case, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH is limited to typical, expectable damages. This research report does not constitute an offer or a solicitation of an offer for the purchase or sale of any security. Partners, directors or employees of M.M.Warburg & CO KGaA, Warburg Research GmbH or affiliated companies may serve in a position of responsibility, i.e. on the board of directors of companies mentioned in the report. Opinions expressed in this report are subject to change without notice. All rights reserved.
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DISCLOSURE ACCORDING TO §34B (1) OF THE GERMAN SECURITIES TRADING ACT (WHPG) AND THE ORDINANCE ON THE ANALYSIS OF FINANCIAL INSTRUMENTS (FINANV)
The valuation underlying the investment recommendation for the company analysed here is based on generally accepted and widely used methods of fundamental analysis, such as e.g. DCF Model, Free Cash Flow Potential, Peer Group Comparison or Sum of the Parts Model. The result of this fundamental valuation is modified to take into consideration the analyst's assessment as regards the expected development of investor sentiment and its impact on the share price.
Independent of the applied valuation methods, there is the risk that the price target will not be met, for instance because of unforeseen changes in demand for the company's products, changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rate etc. For investments in foreign markets and instruments there are further risks, generally based on exchange rate changes or changes in political and social conditions.
This commentary reflects the opinion of the relevant author at the point in time of its compilation. A change in the fundamental factors underlying the valuation can mean that the valuation is subsequently no longer accurate. Whether, or in what time frame, an update of this commentary follows is not determined in advance.
In accordance with § 5 (4) of the Ordinance on the Analysis of Financial Instruments (FinAnV) Warburg Research GmbH has implemented additional internal and organisational arrangements to prevent or to deal with conflicts of interest. Among these are the spatial separation of Warburg Research GmbH from M.M.Warburg & CO KGaA and the creation of areas of confidentiality. This prevents the exchange of information, which could form the basis of conflicts of interest for Warburg Research in terms of the analysed issuers or their financial instruments.
The analysts of Warburg Research GmbH do not receive a gratuity – directly or indirectly – from the investment banking activities of M.M.Warburg & CO KGaA or of any company within the Warburg Group.
All prices of financial instruments given in this financial analysis are the closing prices on the last stock-market trading day before the publication date stated, unless another point in time is explicitly stated.
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SOURCES
All data and consensus estimates have been obtained from FactSet except where stated otherwise.
Section 34b of the German Securities Trading Act in combination with the FinAnV requires an enterprise preparing a securities analysis to point out possible conflicts of interest with respect to the company that is the subject of the analysis. A conflict of interest is assumed, in particular, when the enterprise preparing the analysis …
| -1- | … or companies affiliated with this enterprise holds 5% or more of the share capital of the analysed company |
|---|---|
| -2- | … or companies affiliated with this enterprise were involved in the management of a consortium for a public offering of securities which are or whose issuer is the subject of this report within the last twelve months |
| -3- | … or companies affiliated with this enterprise manages the securities of the analysed company on the basis of an existing contract |
| -4- | … or companies affiliated with this enterprise over the previous 12 months has been providing investment banking services for the analysed company for which a compensation has been or will be paid. Warburg Research GmbH receives indirect remuneration from the investment banking activities of M.M.Warburg & CO KGaA. |
| -5- | … effected an agreement with the analysed company for the preparation of the financial analysis |
| -6- | … or companies affiliated with this enterprise regularly trade in shares or derivatives of the analysed company |
| -7- | … or the analyst responsible for this company has other important financial interests in relation to the analysed company such as e.g. the performance of mandates for the analysed company |
| Company | Disclosure | Link to the historical price targets and rating changes (last 12 months) |
|---|---|---|
| CANCOM | 5, 6 | http://www.mmwarburg.com/disclaimer/disclaimer_en/DE0005419105.htm |
INVESTMENT RECOMMENDATION
Investment recommendation: expected direction of the share price development of the financial instrument up to the given price target in the opinion of the analyst who covers this financial instrument.
| -B- | Buy: | The price of the analysed financial instrument is expected to rise over the next 12 months. |
|---|---|---|
| -H- | Hold: | The price of the analysed financial instrument is expected to remain mostly flat over the next 12 months. |
| -S- | Sell: | The price of the analysed financial instrument is expected to fall over the next 12 months. |
| "-" | Rating suspended: | The available information currently does not permit an evaluation of the company. |
WARBURG RESEARCH GMBH – RESEARCH UNIVERSE BY RATING
| Rating | Number of stocks | % of Universe |
|---|---|---|
| Buy | 104 | 52 |
| Hold | 80 | 40 |
| Sell | 12 | 6 |
| Rating suspended | 3 | 2 |
| Total | 199 | 100 |
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING …
… Looking only at companies for which a disclosure according to § 34b of the Germany Securities Trading Act and the FinAnV has to be made.
| Rating | Number of stocks | % of Universe |
|---|---|---|
| Buy | 78 | 57 |
| Hold | 54 | 39 |
| Sell | 4 | 3 |
| Rating suspended | 2 | 1 |
| Total | 138 | 100 |
PRICE AND RATING HISTORY CANCOM AS OF 08.05.2014
The chart has markings if Warburg Research GmbH changed its rating in the last 12 months. Every marking represents the date and closing price on the day of the rating change.
CANCOM
RESEARCH
Head of Equity Sales, USA [email protected] Head of Sales Trading [email protected]
Klaus Schilling +49 40 3282-2664 Gudrun Bolsen +49 40 3282-2679 Dep. Head of Equity Sales, GER [email protected] Sales Trading [email protected]
Marie-Therese Grübner +49 40 3282-2630 Jörg Treptow +49 40 3262-2658 France [email protected] Sales Trading [email protected]
Dirk Rosenfelder +49 40 3282-2692
Philipp Stumpfegger +49 40 3282-2635
Software, IT [email protected] Utilities [email protected]
Ulrich Huwald +49 40 309537-255 Oliver Schwarz +49 40 309537-250 Health Care, Pharma [email protected] Chemicals, Agriculture [email protected]
Retail, Consumer Goods [email protected] Automobiles, Car Suppliers [email protected]
Real Estate [email protected] Steel, Car Suppliers [email protected]
Tim Beckmann +49 40 3282-2665 Bastian Quast +49 40 3282-2701
Matthias Fritsch +49 40 3282-2696 Thekla Struve +49 40 3282-2668
Ömer Güven +49 40 3282-2633 Jan Walter +49 40 3262-2662 Germany [email protected] Sales Trading [email protected]
Michael Kriszun +49 40 3282-2695 Katharina Merckel +49 40 3282-2694 United Kingdom [email protected] Roadshow/Marketing [email protected]
Marc Niemann +49 40 3282-2660 Germany [email protected]
Austria, Switzerland [email protected]
Australia, United Kingdom [email protected]
SALES SALES TRADING
MACRO RESEARCH
Roland Rapelius +49 40 309537-220 Andreas Pläsier +49 40 309537-246 Head of Research [email protected] Banks, Financial Services [email protected]
Henner Rüschmeier +49 40 309537-270 Malte Räther +49 40 309537-185 Head of Research hrueschmeier @warburg-research.com Technology, Telco, Internet [email protected]
Christian Cohrs +49 40 309537-175 Jochen Reichert +49 40 309537-130 Engineering, Logistics [email protected] Telco, Internet, Media [email protected]
Felix Ellmann +49 40 309537-120 Christopher Rodler +49 40 309537-290
Jörg Philipp Frey +49 40 309537-258 Malte Schaumann +49 40 309537-170 Retail, Consumer Goods [email protected] Technology [email protected]
Harald Hof +49 40 309537-125 Susanne Schwartze +49 40 309537-155 Medtech [email protected] Telco, Internet, Media [email protected]
Thilo Kleibauer +49 40 309537-257 Marc-René Tonn +49 40 309537-259
Torsten Klingner +49 40 309537-260 Björn Voss +49 40 309537-254
Eggert Kuls +49 40 309537-256 Andreas Wolf +49 40 309537-140 Engineering [email protected] Software, IT [email protected]
Frank Laser +49 40 309537-235 Stephan Wulf +49 40 309537-150 Construction, Industrials [email protected] Utilities [email protected]
Holger Nass +49 40 3282-2669 Oliver Merckel +49 40 3282-2634
Christian Alisch +49 40 3282-2667 Michael Ilgenstein +49 40 3282-2700 Scandinavia, Spain [email protected] Sales Trading [email protected]
United Kingdom [email protected] Sales Trading [email protected]
United Kingdom [email protected] Sales Trading [email protected]
Carsten Klude +49 40 3282-2572 Macro Research [email protected]
Matthias Thiel +49 40 3282-2401 Macro Research [email protected]
Dr. Christian Jasperneite +49 40 3282-2439 Investment Strategy [email protected]
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| For access please contact: | |||
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