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INVL Technology Investor Presentation 2024
2265_rns_2024-09-19_99e8da66-55a9-496d-9292-0e6d13dc5d31.pdf
Investor Presentation
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+73% year-to-date
The INVL Technology share has rallied strongly on expectations of exits confirming the NAV valuation. We expect the first exit to happen by the end of the year and that the proceeds are promptly distributed to shareholders.
First exit expected this year
The company entered its "exit period" this year and an advisor has been hired to find buyers for the holding companies. The market is pricing in an exit around the NAV proven by the 73% share price rally year-to-date and the NAV discount compression from 42% in our 2023 Update to current 11%, which is below the long-term average discount of 22%.
Proceeds shall be paid out immediately
If an exit happens, the proceeds shall be paid out immediately. Assuming exit(s) worth EUR 13m or EUR 1.08/shr. this year, the implied after tax a payout is EUR 0.83/shr. Worth noting is that the share price should decline by the around same amount following the payout.
Base Case share price raised
We raise our Base case Fair value to EUR 4.01/shr. (prev. 3.79), mainly due to a higher motivated P/Sales multiple (now 1.0x vs. prev. 0.9x), which in turn is due to the strong H1/24 profit growth, expected exits confirming the reported NAV, as well as an expected NAV growth.
Key figures (MEUR)
| 2022 | 2023 | 2024E | 2025E | 2026E | |
|---|---|---|---|---|---|
| Holding company | |||||
| Fair value Financial assets* | 34.9 | 44.9 | 47.2 | 49.0 | 51.4 |
| Change Financial assets | -0.4 | 9.9 | 2.3 | 1.8 | 2.3 |
| Other income | 0.9 | 0.8 | 0.2 | 0.2 | 0.2 |
| Total income | 0.5 | 10.7 | 2.5 | 1.9 | 2.5 |
| Operating expenses | -0.7 | -0.7 | -0.8 | -1.0 | -1.1 |
| Accrued perf. fee | 2.3 | -4.9 | -1.0 | -1.5 | -1.5 |
| Net profit | 2.1 | 5.2 | 0.7 | -0.5 | 0.0 |
| Revenue (m) | 47.2 | 58.7 | 58.5 | 62.2 | 65.5 |
| EBIT (m) | 1.1 | 2.3 | 3.7 | 4.3 | 4.8 |
| XXXXXXXXXXX Revenue growth |
25.7% | 24.3% | -0.3% | 6.3% | 5.3% |
| Dsjf ;lj;lsa lkjdf EBIT margin |
lladksf 2.3% |
ldjsf 3.8% |
kjdsl 6.3% |
fjljsf;lasdjfkljdkl 6.8% |
7.3% |
| fjdkjkljasdfklj kdjaf jdakf j;ldfj;l dkjafj kjdk fjdskjf ;lasjfkjad;f P/Sales jdsj f;djsfk jdkjas |
0.84 fjasdf; |
0.67 | 0.68 j;dlfj;lasjf;ldkjflkjd;lfj;lajf;l |
0.64 | 0.60 jfj |
kljad;fljasfj ;ljasfj Source: Company (historical), Enlight Research (estimates), *external valuation
Baltics - Lithuania Commissioned Research – H1 2024 Update
| Fair value range (EUR) | |
|---|---|
| Bull (P/Sales 1.3x) | 5.13 |
| Base (P/Sales 1.0x) | 4.01 |
| Bear(P/Sales 0.7x) | 2.87 |
| Key Data | |
| Price (EUR) | 3.22 |
| Ticker | INC1L |
| Country | Lithuania |
| Listed | Vilnius (Lithuania) |
| Market Cap (EURm) | 40 |
| Net debt (EURm)* | 0 |
| Shares (m) | 12.2 |
| Free float | 35% |
*Estimated end of 2024
| Price range | |
|---|---|
| 52-week high | 3.28 |
| 52-week low | 1.78 |
Analyst
Coverage frequency
2x per year
Key takeaways
First EXIT expected this year
INVL Technology's Article of Association stipulates that the company will operate for 10 years between 14 July 2016 to 14 July 2026, with a possible 2-year extension. The pre-defined end-date gives exit and mark-to-market assurance to investors which is important with regards to the possible NAV discount elimination. The company's lifespan can be divided into the following three phases: investment period (2016- 2021), value creation period (2021-2024), exit period (2024-2026) with an optional extension till 2028. Hence, we have entered the "exit period" this year and the management is working actively with advisor(s) to sell portfolio companies. We expect the first exit this year. A divestment of a portfolio company at or around NAV could help to reduce the NAV discount substantially. Given the NAV discount compression, it appears like the market is pricing in exits at around NAV (see next key take).
Source: Company
NAV discount signal EXIT around NAV
Since Q1/17, the average quarterly NAV discount has been 22%. In our last Q4/24 Update in April this year, the NAV discount was 42% and we highlighted a 32% upside to reach the long-term average NAV discount (was 23% then). Since then, the share rallied 56% from EUR 2.10 to EUR 3.28 compressing the NAV discount to 11% i.e., smaller than the long-term average discount of 22%. We believe this is a sign of that the market is pricing in exits close to or at NAV.
INVL Technology share NAV discount
Source: Company reports, "Today" calculated on share price of EUR 3.28
EXIT proceeds to be paid out right away
In the event of an exit, the proceeds shall be paid out as dividends right away. Assuming exits in the amount of Enlight's Fair value per share of EUR 5.01 (excluding NAV discount) spread evenly over four years (2025-2028), the payout per annum would be EUR 0.98 per share, which implies an upside of around 19%. Assuming exits in the amount of the last reported NAV of EUR 3.67 per share, the payout would be EUR 0.81 per share over four years, which implies a downside of around 16%. Assuming exits in the amount of EUR 4.34 per share (average of Enlight's Fair value and the last reported NAV), the annual payout would be EUR 0.98 per share, which is roughly where the share is trading now.
Exit simulation based on Enlight Fair value NAV with zero discount
| (EUR) | 2025E | 2026E | 2027E | 2028E | Total |
|---|---|---|---|---|---|
| Divestments per share | 1.25 | 1.25 | 1.25 | 1.25 | 5.01 |
| Fees/shr. | -0.10 | -0.10 | -0.10 | -0.10 | -0.41 |
| Payout per share | 1.15 | 1.15 | 1.15 | 1.15 | 4.59 |
| Net payout per share | 0.98 | 0.98 | 0.98 | 0.98 | 3.90 |
Implied upside 19%
Exit simulation based on last reported NAV with zero discount
| (EUR) | 2025E | 2026E | 2027E | 2028E | Total |
|---|---|---|---|---|---|
| Divestments per share | 0.92 | 0.92 | 0.92 | 0.92 | 3.67 |
| Fees/shr. | -0.10 | -0.10 | -0.10 | -0.10 | -0.41 |
| Payout per share | 0.81 | 0.81 | 0.81 | 0.81 | 3.25 |
| Net payout per share | 0.69 | 0.69 | 0.69 | 0.69 | 2.76 |
Implied upside -16%
Exit simulation based on avg. Enlight FV & Last reported NAV
| (EUR) | 2025E | 2026E | 2027E | 2028E | Total |
|---|---|---|---|---|---|
| Divestments per share | 1.08 | 1.08 | 1.08 | 1.08 | 4.34 |
| Fees/shr. | -0.10 | -0.10 | -0.10 | -0.10 | -0.41 |
| Payout per share | 0.98 | 0.98 | 0.98 | 0.98 | 3.92 |
| Net payout per share | 0.83 | 0.83 | 0.83 | 0.83 | 3.33 |
| Implied upside | 2% |
Source: Enlight Research
Operational development indicates NAV increase
INVL Technology's portfolio companies Q2/24 EBIT increased 59% y-on-y to EUR 0.8m (in line with estimates), driving the H1/24 EBIT to EUR 1.5m, which is more than 3x H1/23. Historically, H2 is better than H1 and hence, we forecast H2/24 EBIT to grow of 21% y-on-y to EUR 2.2m, leading to a full-year 2024 EBIT growth of 63% to EUR 3.7m. In our view, the profit growth motivates a continued NAV increase.
H2 tends to be better than H1
Source: Company reports (historical), Enlight Research (estimates)
Valuation
Overall peer multiples increase
Since our last update in April this year, 3 out of 4 peer segments saw multiple expansion. The Cybersecurity peers' P/Sales median expanded to 2.2x (1.3x), while the Consulting 0.71x (0.58x) and the Infrastructure 0.65x (0.49x) also have reached the highest multiple in the last 2-3 years. Meanwhile, the Software segment P/Sales median declined to 2.0x (2.2x).
P/Sales peer multiple development since Initiation Q2/21 to Q2/24
Apr 2023 (Q4/22 Update) Sep 2023 (Q2/23 Update) Dec 2023 (Q4/23 Update) Sep 2024 (Q2/24 Update)
Source: MarketScreener, Enlight Research, Introduce Research, DnB research, Share prices on 01 September 2024, P/Sales multiple based on current forecast year
Base case Sum-of-the-parts (SOTP) Valuation
Our P/Sales 2024E Base case sum-of-the-parts (SOTP) valuation per share is EUR 4.01 prev. (3.79). Our valuation assumes NAV discount of 20% which is in-line with the long-term average discount of 22% and a bit higher to the current NAV discount around 11%. Our sales weighted P/Sales multiple of 1.0x (0.9x) implies a discount of around 34% to the weighted peer average P/Sales multiple of 1.5x (1.4x).
Fair value Invalda Technology (Base case)
| Weighted P/Sales 2024 | (W)P/Sales | Sales | Sales | Sales | Enlight FV |
Enlight FV/share |
||
|---|---|---|---|---|---|---|---|---|
| Base case | Peer avg. | discount | 2022 | 2023 | 2024E | (EURm) | (EUR) | |
| Business area: Business climate improvement & e-governance | ||||||||
| NRD Companies | 1.2 | 1.7 | 30% | 8.1 | 11.0 | 11.2 | 13.6 | 1.12 |
| Business area: IT services & software | ||||||||
| Novian Companies | 0.8 | 1.2 | 34% | 33.0 | 40.3 | 38.7 | 29.4 | 2.44 |
| Business area: Cybersecurity | ||||||||
| NRD CS | 1.9 | 3.0 | 36% | 6.1 | 7.4 | 8.7 | 16.5 | 1.36 |
| Business area: Business process outsourcing | ||||||||
| FINtime | na | na | na | na | na | na | 0.123 | 0.01 |
| Group total | 1.0 | 1.5 | 34% | 47.2 | 58.7 | 58.5 | 59.6 | 4.93 |
| Sales growth | 26% | 24% | 0% | |||||
| Add Net cash: | 0.9 | 0.07 | ||||||
| Group total: | 60.4 | 5.01 | ||||||
| Less assumed NAV discount: | 20% | 20% | ||||||
| Less assumed NAV discount (EUR): | 12.1 | 1.00 | ||||||
| Enlight Base case Fair Value: | 48.3 | 4.01 |
Source: Historical figures (Company reports), Forecast figures (Enlight Research), Peer P/Sales average (MarketScreener, Enlight Research, Introduce). Based on peer valuation on 01 September 2024
Peer tables
IT Infrastructure services
| Price Mcap (m) | P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. | EBIT marg. | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | Ticker | Ccy | (last) | (last) | 2022 | 2023 | 2024E | 2025E | 2022 | 2023 | 2024E | 2025E |
| Dustin | DUST | SEK | 10.80 | 4,887 | 0.21 | 0.21 | 0.23 | 0.22 | 3.2% | 2.0% | 2.1% | 2.6% |
| Proact IT | PACT | SEK | 155.80 | 4,250 | 0.89 | 0.88 | 0.83 | 0.80 | 5.6% | 5.1% | 6.5% | 6.2% |
| Atea | ATEA | NOK | 144.80 | 16,273 | 0.50 | 0.47 | 0.47 | 0.41 | 3.7% | 3.6% | 3.7% | 4.0% |
| Aixia Group | AIXIA B | SEK | 141.00 | 222 | 1.42 | 2.06 | 1.78 | 1.59 | 1.3% | -3.8% | 0.8% | 3.1% |
| Average | 0.76 | 0.90 | 0.83 | 0.75 | 3.4% | 1.7% | 3.3% | 4.0% | ||||
| Median | 0.70 | 0.67 | 0.65 | 0.61 | 3.5% | 2.8% | 2.9% | 3.6% | ||||
| Cybersecurity | ||||||||||||
| Price Mcap (m) | P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. | EBIT marg. | |||||||
| Company | Ticker | Ccy | (last) | (last) | 2022 | 2023 | 2024E | 2025E | 2022 | 2023 | 2024E | 2025E |
| Clavister Holding | CLAV | SEK | 1.87 | 422 | 3.0 | 2.6 | 2.2 | 1.9 | -36.0% | -19.1% | -8.4% | 1.8% |
| Freja eID Group | FREJA | SEK | 12.50 | 284 | 7.6 | 5.9 | 5.5 | 4.6 | -99.3% | -32.3% | -9.8% | 3.2% |
| Withsecure OYJ | FSC1V | EUR | 1.04 | 183 | 1.4 | 1.3 | 1.2 | 1.1 | -31.6% | -30.7% | -6.5% | -1.2% |
| Average | 4.0 | 3.3 | 3.0 | 2.5 | -55.6% | -27.4% | -8.2% | 2.3% | ||||
| Median | 3.0 | 2.6 | 2.2 | 1.9 | -36.0% | -30.7% | -8.4% | 2.5% | ||||
| Average excluding extremes | -33.8% | |||||||||||
| Software | ||||||||||||
| Price Mcap (m) | P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. | EBIT marg. | |||||||
| Company | Ticker | Ccy | (last) | (last) | 2022 | 2023 | 2024E | 2025E | 2022 | 2023 | 2024E | 2025E |
| Agillic | AGILC | DKK | 9.95 | 110 | 1.6 | 1.7 | 1.7 | 1.6 | -17% | -18% | -8% | -3% |
| Artificial Solutions | ASAI | SEK | 0.452 | 169 | 3.7 | 2.8 | 2.1 | 1.4 | -195% | -120% | -61% | -23% |
| Briox | BRIX | SEK | 2.58 | 148 | 17.1 | 12.4 | 10.6 | 8.7 | -263% | -206% | -146% | -95% |
| FormPipe Software | FPIP | SEK | 26.2 | 1,421 | 2.9 | 2.7 | 2.7 | 2.4 | 3% | 10% | 9% | 14% |
| Fortnox | FNOX | SEK | 58.46 | 35,646 | 27.9 | 21.7 | 17.1 | 13.7 | 36% | 41% | 42% | 44% |
| LeadDesk Oyj | LEADD | EUR | 7.04 | 39 | 1.4 | 1.3 | 1.2 | 1.1 | -5% | -4% | -2% | 0% |
| Lime Technologies | LIME | SEK | 332.5 | 4,417 | 9.0 | 7.7 | 6.3 | 5.5 | 19% | 20% | 19% | 21% |
| Litium | LITI | SEK | 8.04 | 133 | 2.1 | 1.9 | 1.8 | 1.6 | -19% | -5% | 0% | 2% |
| Siili Solutions Oyj | SIILI | EUR | 8.04 | 65 | 0.6 | 0.5 | 0.6 | 0.5 | 9% | 6% | 5% | 5% |
| BuildData | BUILD | SEK | 3.4 | 213 | 2.4 | 2.1 | 1.9 | 1.7 | -27% | -29% | -4% | 4% |
| Average | 6.9 | 5.5 | 4.6 | 3.8 | -46% | -30% | -15% | -3% | ||||
| Median | 2.7 | 2.4 | 2.0 | 1.7 | -11.0% | -4.3% | -1.0% | 3.2% | ||||
| Average excluding extremes | 2.6 | 2.3 | 2.0 | 1.8 | ||||||||
| IT Consulting | ||||||||||||
| Price Mcap (m) | P/Sales | P/Sales | P/Sales | P/Sales EBIT marg. EBIT marg. EBIT marg. | EBIT marg. | |||||||
| Company | Ticker | Ccy | (last) | (last) | 2022 | 2023 | 2024E | 2025E | 2022 | 2023 | 2024E | 2025E |
| B3 Consulting Group | B3 | SEK | 90.8 | 805 | 0.70 | 0.71 | 0.69 | 0.56 | 12.0% | 7.5% | 4.6% | 8.7% |
| CAG Group | CAG | SEK | 110 | 788 | 0.99 | 0.89 | 0.87 | 0.85 | 9.1% | 8.2% | 8.8% | 9.6% |
| Digia Oyj | DIGIA | EUR | 5.94 | 159 | 0.93 | 0.83 | 0.78 | 0.75 | 7.4% | 7.2% | 7.8% | 8.3% |
| Solteq Oyj | SOLTEQ | EUR | 0.694 | 13 | 0.20 | 0.23 | 0.25 | 0.24 | -6.4% | -6.1% | 3.1% | 5.8% |
| Time People Group | TPGR | SEK | 11 | 80 | 0.27 | 0.25 | 0.31 | 0.29 | 8.2% | 4.0% | -1.5% | 1.8% |
| Innofactor Plc | IFA1V | EUR | 1.68 | 60 | 0.84 | 0.75 | 0.73 | 0.71 | 6.7% | 7.3% | 6.0% | 7.4% |
| Average | 0.65 | 0.61 | 0.61 | 0.56 | 6.2% | 4.7% | 4.8% | 6.9% | ||||
| Median | 0.77 | 0.73 | 0.71 | 0.63 | 7.8% | 7.2% | 5.3% | 7.9% |
Source: MarketScreener, Enlight Research, Introduce. Based on share prices on 01 September 2024
Q2 Estimates vs. Outcome
Portfolio companies estimates vs. outcome
The Q2/23 Group Sales of EUR 12.0m was 24.4% or EUR 3.9m below our EUR 15.9m estimate. The largest segment, Novian (~2/3 of sales) had 15% lower sales y-on-y, opposite to our 15% sales growth forecast, therefore the Novian segment sales of EUR 7.5m was EUR 2.6m below our estimate. The NRD Companies Q2/24 sales came in at EUR 2.4m or 37% below our estimate, while the Cybersecurity's segment posted EUR 2.1m sales or EUR 0.1m above our forecast. The Q2/24 Group EBIT of EUR 0.8m was EUR 0.1m below our EUR 0.9m forecast, as all segments contributed with the EBIT of around EUR 0.3m each. Worth noting, even though sales came in lower than expected the EBIT margin of 6.7% was higher than our 5.4% estimate.
| Q2/24 | Q2/24 | Diff. | ||
|---|---|---|---|---|
| Sales by portfolio company (EURm) | Estimate | Outcome | EURm | % |
| NRD Companies | 3.8 | 2.4 | -1.4 | -36.5% |
| Novian | 10.1 | 7.5 | -2.6 | -25.9% |
| NRD CS | 2.0 | 2.1 | 0.1 | 7.0% |
| Group sales | 15.9 | 12.0 | -3.9 | -24.4% |
| Q2/24 | Q2/24 | Diff. | ||
| Sales growth | Estimate | Outcome | EURm | %-pts |
| NRD Companies | -1.3% | -37.3% | nm | -36.0 |
| Novian | 14.8% | -15.0% | nm | -29.8 |
| NRD CS | 12.0% | 19.9% | nm | 7.9 |
| Group sales growth | 10.1% | -16.8% | nm | -2688 |
| Q2/24 | Q2/24 | Diff. | ||
| EBIT by portfolio company (EURm) | Estimate | Outcome | EURm | % |
| NRD Companies | 0.3 | 0.3 | 0.0 | -12.6% |
| Novian | 0.3 | 0.3 | 0.0 | -4.5% |
| NRD CS | 0.3 | 0.3 | 0.0 | 4.8% |
| Eliminations | 0.0 | 0.0 | 0.0 | 23.5% |
| Group EBIT (after Eliminations) | 0.9 | 0.8 | 0.0 | -5.6% |
| Q2/24 | Q2/24 | Diff. | ||
| EBIT margin by Segment | Estimate | Outcome | EURm | %-pts |
| NRD Companies | 7.7% | 10.7% | nm | 2.9 |
| Novian (incl. Elsis PRO) | 3.4% | 4.3% | nm | 1.0 |
| NRD CS | 13.0% | 12.7% | nm | -0.3 |
Source: Company reports, Enlight Research
Estimate changes
Portfolio companies Estimate changes
Our Total Sales forecast for the portfolio companies has been reduced by approximately EUR 5m (8%) for 2024-2026, primarily due to lower-than-expected Novian sales in H1/24. However, EBIT projections remain largely unchanged, with our 2024-2025 estimate still near EUR 4m and around EUR 5m for 2026, driven by solid profitability across all segments.
| Sales all portfolio companies (EURm) | 2024E | 2025E | 2026E |
|---|---|---|---|
| Old estimate | 64.0 | 67.6 | 70.8 |
| New estimate | 58.5 | 62.2 | 65.5 |
| Change | -5.5 | -5.4 | -5.3 |
| Change (pct) | -8.5% | -8.0% | -7.4% |
| EBIT all portfolio companies (EURm) | 2024E | 2025E | 2026E |
|---|---|---|---|
| Old estimate | 3.9 | 4.4 | 5.0 |
| New estimate | 3.7 | 4.3 | 4.8 |
| Change | -0.2 | -0.1 | -0.2 |
| Change (pct) | -5.2% | -2.6% | -4.6% |
Source: Enlight Research
Holding company Estimate changes
We have made slight adjustments, reducing the Fair Value (FV) of financial assets by 4-6% for the forecast period 2024-26 (following a 22-25% increase in our previous report). 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. Additionally, the higher revised management fee, driven by the expected exit near NAV, lowers the EBIT (lowered EUR 2-3m). 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 | 2024E | 2025E | 2026E |
|---|---|---|---|
| Old estimate | 49.2 | 51.4 | 54.9 |
| New estimate | 47.2 | 49.0 | 51.4 |
| Change | -1.9 | -2.4 | -3.5 |
| Change (pct) | -4.0% | -4.7% | -6.4% |
| Change FV financial assets | 2024E | 2025E | 2026E |
| Old estimate | 4.3 | 2.2 | 3.5 |
| New estimate | 2.3 | 1.8 | 2.3 |
| Change | -1.9 | -0.4 | -1.1 |
| Change (pct) | -45.4% | -20.1% | -32.5% |
| Total income | 2024E | 2025E | 2026E |
| Old estimate | 4.5 | 2.4 | 3.6 |
| New estimate | 2.5 | 1.9 | 2.5 |
| Change | -1.9 | -0.4 | -1.1 |
| Change (pct) | -43.7% | -18.7% | -31.0% |
| EBIT | 2024E | 2025E | 2026E |
| Old estimate | 3.8 | 1.7 | 2.8 |
| New estimate | 0.7 | -0.5 | 0.0 |
| Change | -3.1 | -2.3 | -2.9 |
| Change (pct) | -81.0% | -131.4% | -101.5% |
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.
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.
| INVL Technology | ||
|---|---|---|
| Income Statement | 2022 | 2023 | 2024E | 2025E | 2026E |
|---|---|---|---|---|---|
| Net sales | 0.5 | 10.7 | 2.5 | 1.9 | 2.5 |
| Total operating costs | 1.6 | -5.6 | -1.8 | -2.5 | -2.6 |
| EBITDA | 2.1 | 5.2 | 0.7 | -0.5 | 0.0 |
| 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 | 2.1 | 5.2 | 0.7 | -0.5 | 0.0 |
| Financial net | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Pre-tax profit | 2.1 | 5.2 | 0.7 | -0.5 | -0.1 |
| 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 | 2.1 | 5.2 | 0.7 | -0.5 | -0.1 |
| Balance Sheet | 2022 | 2023 | 2024E | 2025E | 2026E |
| Cash and cash equivalent | 1 | 15 | 4 | 3 | 4 |
| Receivables | 0 | 0 | 0 | 0 | 0 |
| Inventories | 0 | 0 | 0 | 0 | 0 |
| Other current assets | 1 | 1 | 1 | 1 | 1 |
| Total current assets | 2 | 16 | 4 | 4 | 4 |
| 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 | 45 | 47 | 49 | 51 |
| Associated companies | 0 | 0 | 0 | 0 | 0 |
| Other long-term assets | 2 | 2 | 2 | 2 | 2 |
| Total fixed assets | 37 | 47 | 49 | 51 | 53 |
| Total Assets | 38 | 63 | 54 | 55 | 58 |
| Accounts payable | 0 | 0 | 0 | 0 | 0 |
| Short-term IB debt | 0 | 19 | 9 | 11 | 23 |
| Other current liabilities | 0 | 0 | 0 | 0 | 0 |
| Total current liabilities | 0 | 20 | 9 | 11 | 23 |
| 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. Total Liabilities |
0 0 |
0 20 |
0 9 |
0 11 |
0 23 |
| Minority interest | 0 | 0 | 0 | 0 | 0 |
| Shareholders' equity | 38 | 43 | 44 | 44 | 35 |
| Total liabilities and equity | 38 | 63 | 54 | 55 | 58 |
| Free Cash Flow | 2022 | 2023 | 2024E | 2025E | 2026E |
|---|---|---|---|---|---|
| Operating profit | 2.1 | 5.2 | 0.7 | -0.5 | 0.0 |
| Depreciation & Amort. | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Working capital chg. | -0.9 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other Operating CF items | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Operating Cash Flow | 1.2 | 5.2 | 0.7 | -0.5 | 0.0 |
| Net investments | -0.3 | -9.9 | -2.3 | -1.8 | -2.3 |
| Other items | -2.3 | 0.0 | 0.0 | 0.0 | 0.0 |
| Free Cash Flow | -1.4 | -4.8 | -1.6 | -2.3 | -2.4 |
| Capital structure | 2022 | 2023 | 2024E | 2025E | 2026E |
| Equity ratio | 99.5% | 69.0% | 82.4% | 79.9% | 60.4% |
| Debt / Equity ratio | 0.0% | 44.6% | 21.0% | 24.7% | 65.1% |
| Gearing % | -1.9% | 9.3% | 12.8% | 18.3% | 54.8% |
| Net debt/EBITDA | -0.3 | 0.8 | 7.8 | -14.8 | -437.0 |
| Profitability | 2022 | 2023 | 2024E | 2025E | 2026E |
| ROE | 5.7% | 12.7% | 1.6% | -1.3% | -0.1% |
| FCF yield | -5.4% | -19.8% | -4.2% | -6.0% | -6.2% |
| EBITDA margin | 411.5% | 48.2% | 28.9% | -27.7% | -1.7% |
| EBIT margin | 411.5% | 48.2% | 28.9% | -27.7% | -1.7% |
| PTP margin | 411.5% | 48.2% | 28.5% | -28.2% | -2.2% |
| Net margin | 411.5% | 48.2% | 28.5% | -28.2% | -2.2% |
| Valuation | 2022 | 2023 | 2024E | 2025E | 2026E |
| P/E | 12.3 | 4.7 | 54.4 | -70.8 | -702.0 |
| P/E adjusted | 12.3 | 4.7 | 54.4 | -70.8 | -702.0 |
| P/Sales | 50.7 | 2.2 | 15.5 | 19.9 | 15.4 |
| EV/Sales | 49.3 | 2.6 | 17.7 | 24.0 | 23.0 |
| EV/EBITDA | 12.0 | 5.4 | 61.4 | -86.9 | -1326.7 |
| EV/EBIT | 12.0 | 5.4 | 61.4 | -86.9 | -1326.7 |
| P/BV | 0.7 | 0.6 | 0.9 | 0.9 | 1.1 |
| P/BV tangible | 0.7 | 0.6 | 0.9 | 0.9 | 1.1 |
| Per share ratios | 2022 | 2023 | 2024E | 2025E | 2026E |
| EPS | 0.18 | 0.43 | 0.06 | -0.05 | 0.00 |
| EPS, adjusted | 0.18 | 0.43 | 0.06 | -0.05 | 0.00 |
| Operating CF/share | 0.10 | 0.43 | 0.06 | -0.04 | 0.00 |
| Free Cash Flow/share | -0.12 | -0.40 | -0.13 | -0.19 | -0.20 |
| BV/share | 3.17 | 3.60 | 3.66 | 3.61 | 2.89 |
| Tangible BV/share | 3.17 | 3.60 | 3.66 | 3.61 | 2.89 |
| Div. per share | 0.00 | 0.00 | 0.00 | 0.72 | 0.72 |
| Div. payout ratio | 0.0% | 0.0% | 0.0% | na | na |
| Dividend yield | 0.0% | 0.0% | 0.0% | 22.4% | 22.4% |
| Shareholders | Capital | Votes | |||
| UAB LJB Investments | 7.738 | 19.91 % | |||
| INVL Life | 5.981 | 15.39 % | |||
| Irena Ona Miseikiene | 4.679 | 12.04 % | |||
| AB Lietuvos draudimas | 2.903 | 7.47 % | |||
| Kazimieras Tonkunas | 2.157 | 5.55 % | |||
| Alvydas Banys | 1.974 | 5.08 % | |||
| Key people | |
|---|---|
| CEO | Kazimieras Tonkunas |
| CFO | |
| IR | |
| Chairman | Kazimieras Tonkunas |
| P/E | EPS |
|---|---|
| Price per share | Profit before extraordinary items and taxes – income taxes + |
| Earnings per share | minority interest |
| Number of shares | |
| Earnings per share | |
| P/Sales | 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 |
| Market cap + Net debt + Minority interest at market value – share of | Sales |
| associated companies at market value | Number of shares |
| 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 | Interest-bearing debt |
| Balance sheet total – interest-free short-term debt – long-term advances | 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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