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Napatech

Napatech

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Smart network adapter solutions

Napatech is a tech company that develops and markets smart network adaptors and related solutions (both software and hardware). It sells primarily to large global OEMs (+140 customers), which then sell to end-users. The end-users of Napatech solutions are typically large firms within sectors such as telecommunications, financial services, and governments.

Napatech is positioned in a global market where we expect to see double-digit demand growth for the foreseeable future. If the company can grow with the market over time, we assess that it could potentially scale its operating margin significantly, towards 20%.

Napatech is a small company (<100 employees), which faces major global competition. it is uncertain whether napatech will be able to grow with the market. also, napatech needs to ramp-up and establish new market verticals in order to achieve double-digit growth over time, and its ability to achieve this is uncertain.></100>

Financials

DKKm 2021 2022e 2023e
Sales 195 247 329
Sales growth (%) 0,6 26,2 33,5
EBITDA 53 38 69
EBITDA margin (%) 27,1 15,4 21,1
EBIT adj 31 8 31
EBIT adj margin (%) 15,7 3,4 9,5
Pretax profit 37 9 31
EPS rep 0,48 0,08 0,29
EPS growth (%) 311,3 -82,6 247,6
EPS adj 0,48 0,08 0,29
DPS 0 0 0
EV/EBITDA (x) 14,2 16,6 8,9
EV/EBIT adj (x) 24,5 76 19,7
P/E (x) 19,2 89,3 25,7
P/E adj (x) 19,2 89,3 25,7
EV/sales (x) 3,8 2,6 1,9
FCF yield (%) -2,1 -4,7 2,2
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -0,4 0,2 -0,1
Lease adj. FCF yield (%) -2,1 -4,7 2,2
Lease adj. ND/EBITDA -0,6 0,1 -0,2
DKKm 2021 2022e 2023e
Sales 195 247 329
COGS -55 -75 -102
Gross profit 140 172 227
Other operating items -87 -134 -158
EBITDA 53 38 69
Depreciation on tangibles 0 0 0
Depreciation on intangibles -24 -22 -26
EBITA 31 8 31
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 31 8 31
Other financial items 0 0 0
Net financial items 6 1 0
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 37 9 31
Tax 3 -2 -7
Net profit 40 7 24
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 40 7 24
EPS 0,48 0,08 0,29
EPS Adj 0,48 0,08 0,29
Total extraordinary items after tax 0 0 0
Tax rate (%) 8,7 -22 -22
Gross margin (%) 71,8 69,7 69
EBITDA margin (%) 27,1 15,4 21,1
EBITA margin (%) 15,7 3,4 9,5
EBIT margin (%) 15,7 3,4 9,5
Pretax margin (%) 18,9 3,6 9,5
Net margin (%) 20,6 2,8 7,4
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 0,6 26,2 33,5
EBITDA growth (%) 48,9 -28 82,1
EBIT growth (%) 199,1 -72,9 277,3
Net profit growth (%) 311,3 -82,6 247,6
EPS growth (%) 311,3 -82,6 247,6
Profitability 2021 2022 2023
ROE (%) 36 5,1 16
ROE Adj (%) 36 5,1 16
ROCE (%) 28,7 6 18
ROCE Adj(%) 28,7 6 18
ROIC (%) 41,8 5 16,1
ROIC Adj (%) 41,8 5 16,1
Adj earnings numbers 2021 2022 2023
EBITDA Adj 53 38 69
EBITDA Adj margin (%) 27,1 15,4 21,1
EBITA Adj 31 8 31
EBITA Adj margin (%) 15,7 3,4 9,5
EBIT Adj 31 8 31
EBIT Adj margin (%) 15,7 3,4 9,5
Pretax profit Adj 37 9 31
Net profit Adj 40 7 24
Net profit to shareholders Adj 40 7 24
Net Adj margin (%) 20,6 2,8 7,4
Depreciation and amortisation -22 -30 -38
Of which leasing depreciation -5 -3 -2
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 53 38 69
EBITDA lease Adj margin (%) 27,1 15,4 21,1
Leasing payments 0 0 0
DKKm 2021 2022e 2023e
EBITDA 53 38 69
Net financial items 6 1 0
Paid tax -1 -3 -7
Non-cash items 0 0 0
Cash flow before change in WC 58 36 62
Change in WC -43 -11 -2
Operating cash flow 15 25 61
CAPEX tangible fixed assets -7 -10 -6
CAPEX intangible fixed assets -29 -44 -41
Acquisitions and disposals 5 0 0
Free cash flow -16 -29 14
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 13 -17 -4
Decrease in net IB debt 28 7 32
Balance Sheet (DKKm) 2021 2022 2023
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 35 36 37
Tangible fixed assets 14 17 15
Other fixed assets 6 6 6
Fixed assets 71 96 105
Inventories 24 37 36
Receivables 42 52 60
Other current assets 0 0 0
Cash and liquid assets 39 22 34
Total assets 177 208 236
Shareholders equity 133 140 165
Minority 0 0 0
Total equity 133 140 165
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 6 6 6
Short-term debt 9 24 24
Accounts payable 11 6 7
Other current liabilities 11 28 32
Total liabilities and equity 177 208 236
Net IB debt -23 6 -7
Net IB debt excl. pension debt -23 6 -7
Capital invested 110 147 157
Working capital 45 55 57
EV breakdown 2021 2022 2023
Market cap. diluted (m) 774 626 626
Net IB debt Adj -23 6 -7
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 751 632 618
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 118,6 128,4 148,5
Capital invested turnover (%) 331,3 405,6 453
Capital employed turnover (%) 163,9 177,9 180,4
Inventories / sales (%) 7,4 7,3 5,3
Customer advances / sales (%) 0 0 0
Payables / sales (%) 13,8 13,4 10,6
Working capital / sales (%) 12,3 20,2 17
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -17,3 4,3 -4,5
Net debt / market cap (%) -2,1 1 -1,2
Equity ratio (%) 75,5 67,7 69,9
Net IB debt adj. / equity (%) -17,3 4,3 -4,5
Current ratio (%) 313,3 182,4 197,9
EBITDA / net interest (%) -835,1 -5621,1 59908
Net IB debt / EBITDA (%) -43,7 16 -10,7
Interest cover (%) 5917,3 1503 2696,4
Lease liability amortisation 0 0 0
Other intangible assets 45 67 79
Right-of-use asset 0 0 0
Total other fixed assets 11 12 12
Leasing liability 7 4 3
Total other long-term liabilities 5 5 5
Net IB debt excl. leasing -30 2 -10
Net IB debt / EBITDA lease Adj (%) -57,4 5,7 -15
DKKm 2021 2022e 2023e
Shares outstanding adj. 83 83 83
Fully diluted shares Adj 83 83 83
EPS 0,48 0,08 0,29
Dividend per share Adj 0 0 0
EPS Adj 0,48 0,08 0,29
BVPS 1,61 1,69 1,98
BVPS Adj 1,06 0,88 1,04
Net IB debt / share -0,3 0,1 -0,1
Share price 12,99 7,53 7,53
Market cap. (m) 1079 626 626
Valuation 2021 2022 2023
P/E 19,2 89,3 25,7
EV/sales 3,84 2,56 1,88
EV/EBITDA 14,2 16,6 8,9
EV/EBITA 24,5 76 19,7
EV/EBIT 24,5 76 19,7
Dividend yield (%) 0 0 0
FCF yield (%) -2,1 -4,7 2,2
P/BVPS 5,8 4,45 3,8
P/BVPS Adj 8,78 8,56 7,25
P/E Adj 19,2 89,3 25,7
EV/EBITDA Adj 14,2 16,6 8,9
EV/EBITA Adj 24,5 76 19,7
EV/EBIT Adj 24,5 76 19,7
EV/cap. employed 5 3,8 3,2
Investment ratios 2021 2022 2023
Capex / sales 18,2 22 14,3
Capex / depreciation 201,1 203,6 130,5
Capex tangibles / tangible fixed assets 49,6 59,7 40,4
Capex intangibles / definite intangibles 62,9 65,8 52,5
Depreciation on intangibles / definite intangibles 37,3 33 38,4
Depreciation on tangibles / tangibles 5,7 26,6 40,8
Lease adj. FCF yield (%) -2,1 -4,7 2,2

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Media

Napatech - Company presentation with CEO Ray Smets
Napatech - Company presentation with CEO Ray Smets

Main shareholders - Napatech

Main shareholders Share capital % Voting shares % Verified
Verdane Capital 27.2 % 27.2 % 29 Apr 2022
Sundt AS 10.2 % 10.2 % 29 Apr 2022
SEB Fonder 7.9 % 7.9 % 30 Apr 2022
Ludvig Lorentzen AS 7.2 % 7.2 % 29 Apr 2022
Arbejdsmarkedets Tillægspension (ATP) 4.8 % 4.8 % 29 Apr 2022
SEBinvest 3.3 % 3.3 % 31 Jan 2022
Brownske Bevegelser AS 3.2 % 3.2 % 29 Apr 2022
MP Pensjon PK 2.5 % 2.5 % 29 Apr 2022
DNB Fonder 2.0 % 2.0 % 21 May 2019
Nordnet Bank AB 1.9 % 1.9 % 29 Apr 2022
Source: Holdings by Modular Finance AB