SAVE THE DATE - Hypoport AG

Seven Principles AG
Germany/Software & Computer Services Analyser
$nomcompagnie$ (Buy)
Buy
Recommendation unchanged
Share price: EUR
closing price as of 07/05/2012
Target price: EUR
from Target Price: EUR
Reuters/Bloomberg
7.09
10.00
11.00
T3TG.DE/T3T GR
Market capitalisation (EURm) 29
Current N° of shares (m) 4
Free float 100%
Daily avg. no. trad. sh. 12 mth 2,966
Daily avg. trad. vol. 12 mth (m) 0
Price high 12 mth (EUR) 9.00
Price low 12 mth (EUR) 5.99
Abs. perf. 1 mth -7.80%
Abs. perf. 3 mth -9.10%
Abs. perf. 12 mth -20.34%
Key financials (EUR) 12/11 12/12e 12/13e
Sales (m) 99 104 111
EBITDA (m) 6 7 7
EBITDA margin 6.1% 6.5% 6.7%
EBIT (m) 5 6 6
EBIT margin 5.1% 5.5% 5.6%
Net Profit (adj.)(m) 3 4 4
ROCE 12.0% 12.6% 13.3%
Net debt/(cash) (m) (8) (11) (14)
Net Debt/Equity -0.3 -0.4 -0.5
Debt/EBITDA -1.3 -1.6 -1.9
Int. cover(EBITDA/Fin. int) 17.8 43.2 65.4
EV/Sales 0.2 0.2 0.1
EV/EBITDA 4.0 2.8 2.2
EV/EBITDA (adj.) 4.0 2.8 2.2
EV/EBIT 4.8 3.4 2.6
P/E (adj.) 9.4 7.7 6.9
P/BV 1.3 1.1 0.9
OpFCF yield 12.5% 10.3% 10.5%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) 0.81 0.92 1.03
BVPS 5.63 6.55 7.58
DPS 0.00 0.00 0.00
9.5 vvdsvdvsdy
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12
Source: Factset
Shareholders:
Analyst(s):
SEVEN PRINCIPLES AG MDAX (Rebased)
Adrian Pehl, CFA, Equinet Bank
adrian.pehl@equinet-ag.de
+49 69 58997 438
1Q12 gross result below expectations – outlook kept
The facts: Seven Principles (T3T) released 1Q12 sales of EUR 24.3m which
exceeded our forecast slightly by c. EUR 0.5m. Thus, T3T managed to show a
flat top line yoy whereas our projection of EUR 23.8m equalled minus 2% yoy.
Nevertheless, the top line could have been better once the utilisation of
consultants had been higher. Here, however, T3T claimed that after the concluded
restructuring at the end of the last year, utilisation has still to be improved. Please
remember that T3T has guided for a relatively weaker first half and a better
second.
At the same time, T3T took obviously a higher share of business as prime
contractor. This was the reason for a lower than expected gross margin (60.9%
instead of 65.5%). However, this circumstance should pay out in later periods.
Nevertheless, about EUR 1m profit was missing relative to our 1Q12
expectation and the EBITDA came in at EUR minus 0.2m. (equinet: EUR
0.8m).
Hence, the net result was also negative and was released at EUR minus 0.3m
(equinet: plus EUR 0.4m). The respective EPS at EUR minus 0.08.
1Q12 review
EUR m 1Q12a 1Q12e delta 1Q11 yoy
Sales 24.3 23.8 2% 24.3 0%
EBITDA -0.2 0.8 n/a 1.7 n/a
EBITDA margin -0.8% 3.5% -430bp 7.0% -780bp
Net income -0.3 0.4 n/a 1.0 n/a
PS (€) -0.08 0.09 n/a 0.24 n/a
Source: company data, equinet estimates
The FCF in 1Q12 was negative at EUR minus 5.2m (1Q11: EUR minus 3.1m).
Liquid assets amounted to EUR 3.8m (EUR 4.9m) at the end of 1Q12.
T3T confirmed the outlook – under the precondition of a positive overall
economic climate – and forecasts FY12 sales of EUR 105m and an EBITDA of
EUR 7m.
Our analysis: Clearly, 1Q12 should be seen as disappointing. However, there is
good chance that T3T can reverse the negative trend in 2H12. Nevertheless, we
have reduced our margin expectation for FY12 and following periods by
0.5%. Our FY12 EBITDA – that was slightly above guidance – reduces from EUR
7.3m to EUR 6.8m.
Model changes
EUR m
2012e
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2013e
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2013e
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2014e
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Group Sales 103.8 103.8 0% 110.9 110.9 0% 116.4 116.4 0%
Group EBITDA 7.3 6.8 -7% 8.0 7.4 -7% 8.6 8.0 -6%
EBITDA margin 7.0% 6.5% -50bp 7.2% 6.7% -50bp 7.4% 6.9% -50bp
EPS [EUR] 1.01 0.92 -8% 1.12 1.03 -8% 1.23 1.13 -8%
Source: company data, equinet estimates
Conclusion & Action: As a consequence of lowered estimates, we reduced our
DCF based PT by EUR 1 to EUR 10. We nevertheless confirm our „Buy‟ rating.