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StrongPoint

StrongPoint

Retail technology solutions

StrongPoint is a retail technology company that sells a wide variety of technology solutions that save costs, increase productivity, reduce theft or facilitate e-commerce sales for retailers. Its product portfolio includes electronic shelf labels, cash management systems, self-checkout terminals, click & collect lockers and digital e-commerce solutions. In addition, it holds strong positions in security cases for cash-in-transit and in adhesive labels. The company has strong positions in Norway, Sweden and the Baltics and is targeting to grow significantly in Spain.

The retail technology market is growing healthily, driven by e-commerce and a tough competitive landscape, forcing retailers to adopt new technology solutions to remain competitive. For StrongPoint, this creates a double opportunity: 1) StrongPoint delivers technology solutions that help retailers improve efficiency, and 2) StrongPoint sells e-commerce solutions to physical retailers that have their own online offerings. StrongPoint has a solid potential for future growth in Spain, which is a large and fragmented market and where the cash share is very high at 87%.

StrongPoint’s earnings are to some degree dependent on large product orders. If StrongPoint is unable to win large contracts from new or existing customers, it could pose a risk to its future sales and earnings growth. The Nordic grocery retail market is highly concentrated and several of these large chains are StrongPoint customers. Losing one of these customers could result in a significant loss of repeat business for StrongPoint. As there are some competing products, StrongPoint could be exposed to price pressure from new or existing competitors. Other risk factors include FX, macroeconomy, warranty issues and regulatory risks.

NOKm 2021 2022e 2023e
Sales 981 1193 1293
Sales growth (%) -17 21,6 8,4
EBITDA 54 75 111
EBITDA margin (%) 5,5 6,3 8,6
EBIT adj 42 51 83
EBIT adj margin (%) 4,2 4,3 6,4
Pretax profit 26 42 77
EPS rep 4,3 0,78 1,36
EPS growth (%) 95,3 -81,8 73,4
EPS adj 0,82 0,85 1,36
DPS 0,8 0,8 0,85
EV/EBITDA (x) 19,1 11,4 7,6
EV/EBIT adj (x) 24,7 16,7 10,1
P/E (x) 6 28,2 16,3
P/E adj (x) 31,5 25,9 16,3
EV/sales (x) 1 0,7 0,7
FCF yield (%) 36,1 6,3 6,3
Dividend yield (%) 3,1 3,6 3,8
Net IB debt/EBITDA -2,2 -1,7 -1,2
Lease adj. FCF yield (%) 36,1 6,3 6,3
Lease adj. ND/EBITDA -2,3 -2,1 -1,6
NOKm 2021 2022e 2023e
Sales 981 1193 1293
COGS -560 -713 -756
Gross profit 421 480 537
Other operating items -368 -406 -426
EBITDA 54 75 111
Depreciation on tangibles -39 -36 -30
Depreciation on intangibles 0 0 0
EBITA 28 54 90
Goodwill impairment charges 0 0 0
Other impairment and amortisation -14 -10 -9
EBIT 28 47 83
Other financial items 1 43 0
Net financial items -2 -5 -6
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 26 42 77
Tax -4 -7 -17
Net profit 22 35 60
Minority interest 0 0 0
Net profit discontinued 168 0 0
Net profit to shareholders 191 35 60
EPS 4,3 0,78 1,36
EPS Adj 0,82 0,85 1,36
Total extraordinary items after tax -14 -4 0
Tax rate (%) -13,7 -16,1 -22
Gross margin (%) 42,9 40,3 41,5
EBITDA margin (%) 5,5 6,3 8,6
EBITA margin (%) 2,8 4,5 7
EBIT margin (%) 2,8 3,9 6,4
Pretax margin (%) 2,6 3,5 6
Net margin (%) 2,3 2,9 4,7
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -17 21,6 8,4
EBITDA growth (%) -64,8 39,2 49
EBIT growth (%) -68,2 70,5 77
Net profit growth (%) -62 55,7 73,4
EPS growth (%) 95,3 -81,8 73,4
Profitability 2021 2022 2023
ROE (%) 44,1 7,1 12,1
ROE Adj (%) 8,4 9,3 13,5
ROCE (%) 5,3 8,5 15
ROCE Adj(%) 8 10,5 16,2
ROIC (%) 6,1 10,6 17,6
ROIC Adj (%) 9,2 11,5 17,6
Adj earnings numbers 2021 2022 2023
EBITDA Adj 68 79 111
EBITDA Adj margin (%) 6,9 6,6 8,6
EBITA Adj 42 58 90
EBITA Adj margin (%) 4,2 4,9 7
EBIT Adj 42 51 83
EBIT Adj margin (%) 4,2 4,3 6,4
Pretax profit Adj 40 53 84
Net profit Adj 36 46 67
Net profit to shareholders Adj 36 46 67
Net Adj margin (%) 3,7 3,8 5,2
Depreciation and amortisation -25 -21 -21
Of which leasing depreciation -13 -15 -16
EO items -14 -4 0
Impairment and PPA amortisation 0 -7 -7
EBITDA lease Adj 68 79 111
EBITDA lease Adj margin (%) 6,9 6,6 8,6
Leasing payments 0 0 0
NOKm 2021 2022e 2023e
EBITDA 54 75 111
Net financial items -2 -5 -6
Paid tax -4 -7 -17
Non-cash items 0 0 0
Cash flow before change in WC 48 63 89
Change in WC 177 -14 -21
Operating cash flow 225 48 68
CAPEX tangible fixed assets -9 -6 -6
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 197 20 0
Free cash flow 414 62 62
Dividend paid -31 -36 -36
Share issues and buybacks -14 -1 0
Other non cash items -227 -27 -16
Decrease in net IB debt -48 64 22
Balance Sheet (NOKm) 2021 2022 2023
Goodwill 125 120 120
Indefinite intangible assets 47 43 34
Definite intangible assets 0 0 0
Tangible fixed assets 19 20 20
Other fixed assets 7 2 2
Fixed assets 255 223 216
Inventories 211 186 197
Receivables 176 231 254
Other current assets 31 31 31
Cash and liquid assets 174 180 191
Total assets 847 851 889
Shareholders equity 498 488 513
Minority 0 0 0
Total equity 498 488 513
Long-term debt 11 11 11
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 4 5 5
Short-term debt 5 5 5
Accounts payable 114 120 133
Other current liabilities 168 181 181
Total liabilities and equity 847 851 889
Net IB debt -116 -126 -137
Net IB debt excl. pension debt -116 -126 -137
Capital invested 382 362 376
Working capital 136 147 169
EV breakdown 2021 2022 2023
Market cap. diluted (m) 1145 983 983
Net IB debt Adj -116 -126 -137
Market value of minority 0 0 0
Reversal of shares and participations -5 -5 -5
Reversal of conv. debt assumed equity 0 0 0
EV 1024 852 841
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 120,2 140,5 148,6
Capital invested turnover (%) 312,7 293,8 280,2
Capital employed turnover (%) 295,3 251,3 222,5
Inventories / sales (%) 12 13,1 14,8
Customer advances / sales (%) 0 0 0
Payables / sales (%) 6,8 8,5 11
Working capital / sales (%) 11,3 11,9 12,2
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -23,3 -25,9 -26,8
Net debt / market cap (%) -9 -12,9 -14
Equity ratio (%) 58,9 57,4 57,7
Net IB debt adj. / equity (%) -23,3 -25,9 -26,8
Current ratio (%) 195,6 200,3 206,1
EBITDA / net interest (%) 3341,1 1383,5 1985,1
Net IB debt / EBITDA (%) -216,6 -169,4 -123,4
Interest cover (%) 1713,6 998,9 1607,7
Lease liability amortisation 0 0 0
Other intangible assets 30 22 15
Right-of-use asset 43 38 38
Total other fixed assets 38 23 23
Leasing liability 42 38 38
Total other long-term liabilities 9 9 9
Net IB debt excl. leasing -158 -165 -176
Net IB debt / EBITDA lease Adj (%) -233,9 -209,4 -157,8
NOKm 2021 2022e 2023e
Shares outstanding adj. 44 44 44
Fully diluted shares Adj 44 44 44
EPS 4,3 0,78 1,36
Dividend per share Adj 0,8 0,8 0,9
EPS Adj 0,82 0,85 1,36
BVPS 11,23 11 11,57
BVPS Adj 7,73 7,79 8,51
Net IB debt / share -2,6 -2,8 -3,1
Share price 29,18 22,15 22,15
Market cap. (m) 1295 983 983
Valuation 2021 2022 2023
P/E 6 28,2 16,3
EV/sales 1,04 0,71 0,65
EV/EBITDA 19,1 11,4 7,6
EV/EBITA 37,2 15,8 9,3
EV/EBIT 37,2 18,2 10,1
Dividend yield (%) 3,1 3,6 3,8
FCF yield (%) 36,1 6,3 6,3
P/BVPS 2,3 2,01 1,92
P/BVPS Adj 3,34 2,84 2,6
P/E Adj 31,5 25,9 16,3
EV/EBITDA Adj 15,1 10,8 7,6
EV/EBITA Adj 24,7 14,7 9,3
EV/EBIT Adj 24,7 16,7 10,1
EV/cap. employed 1,8 1,6 1,5
Investment ratios 2021 2022 2023
Capex / sales 0,9 0,5 0,4
Capex / depreciation 72,2 116,3 100
Capex tangibles / tangible fixed assets 46,2 31 27,8
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 24,9 0 0
Depreciation on tangibles / tangibles 24,2 26,6 27,8
Lease adj. FCF yield (%) 36,1 6,3 6,3

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Media

StrongPoint - Company presentation with CEO Jacob Tveraabak
StrongPoint - Company presentation with CEO Jacob Tveraabak

Main Shareholders - Strongpoint

Main shareholders Share capital % Voting shares % Verified
Strømstangen AS 8.9 % 8.9 % 11 May 2022
Nordnet Bank AB 5.4 % 5.4 % 11 May 2022
Sole Active AS 5.0 % 5.0 % 11 May 2022
Canaccord Genuity Wealth Management 4.5 % 4.5 % 31 Jan 2022
V. Eiendom Holding AS 4.1 % 4.1 % 11 May 2022
Quaero Capital S.A 3.2 % 3.2 % 31 Oct 2021
Nordnet Pensionsförsäkring 3.2 % 3.2 % 31 Jul 2021
Avanza Bank AB 2.8 % 2.8 % 11 May 2022
Georg Zetterberg 2.5 % 2.5 % 31 Jul 2021
Jan Ring 2.3 % 2.3 % 11 May 2022
Source: Holdings by Modular Finance AB