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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 1321 1564
Sales growth (%) -17 34,6 18,4
EBITDA 54 82 132
EBITDA margin (%) 5,5 6,2 8,5
EBIT adj 42 53 92
EBIT adj margin (%) 4,2 4 5,9
Pretax profit 26 43 87
EPS rep 4,3 0,81 1,51
EPS growth (%) 95,3 -81,2 86,6
EPS adj 0,82 0,98 1,71
DPS 0,8 0,8 0,85
EV/EBITDA (x) 19,1 9 5,3
EV/EBIT adj (x) 24,7 14 7,6
P/E (x) 6 21 11,3
P/E adj (x) 31,5 17,4 9,9
EV/sales (x) 1 0,6 0,5
FCF yield (%) 36,1 -7,2 10,7
Dividend yield (%) 3,1 4,7 5
Net IB debt/EBITDA -2,2 -0,3 -0,4
Lease adj. FCF yield (%) 36,1 -7,2 10,7
Lease adj. ND/EBITDA -2,3 -0,7 -0,7
NOKm 2021 2022e 2023e
Sales 981 1321 1564
COGS -560 -788 -914
Gross profit 421 533 649
Other operating items -368 -451 -517
EBITDA 54 82 132
Depreciation on tangibles -39 -36 -30
Depreciation on intangibles 0 0 0
EBITA 28 54 104
Goodwill impairment charges 0 0 0
Other impairment and amortisation -14 -10 -9
EBIT 28 49 92
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 43 87
Tax -4 -7 -19
Net profit 22 36 68
Minority interest 0 0 0
Net profit discontinued 168 0 0
Net profit to shareholders 191 36 68
EPS 4,3 0,81 1,51
EPS Adj 0,82 0,98 1,71
Total extraordinary items after tax -14 -4 0
Tax rate (%) -13,7 -16,2 -22
Gross margin (%) 42,9 40,3 41,5
EBITDA margin (%) 5,5 6,2 8,5
EBITA margin (%) 2,8 4,1 6,6
EBIT margin (%) 2,8 3,7 5,9
Pretax margin (%) 2,6 3,3 5,5
Net margin (%) 2,3 2,7 4,3
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -17 34,6 18,4
EBITDA growth (%) -64,8 53,2 60,9
EBIT growth (%) -68,2 76,8 89,8
Net profit growth (%) -62 62,1 86,6
EPS growth (%) 95,3 -81,2 86,6
Profitability 2021 2022 2023
ROE (%) 44,1 7,3 13,1
ROE Adj (%) 8,4 9,2 15,3
ROCE (%) 5,3 8,8 16,2
ROCE Adj(%) 8 10,5 18,2
ROIC (%) 6,1 11,7 22,6
ROIC Adj (%) 9,2 12,6 22,6
Adj earnings numbers 2021 2022 2023
EBITDA Adj 68 86 132
EBITDA Adj margin (%) 6,9 6,5 8,5
EBITA Adj 42 58 104
EBITA Adj margin (%) 4,2 4,4 6,6
EBIT Adj 42 53 92
EBIT Adj margin (%) 4,2 4 5,9
Pretax profit Adj 40 53 98
Net profit Adj 36 46 79
Net profit to shareholders Adj 36 46 79
Net Adj margin (%) 3,7 3,5 5,1
Depreciation and amortisation -25 -28 -28
Of which leasing depreciation -13 -15 -16
EO items -14 -4 0
Impairment and PPA amortisation 0 -6 -12
EBITDA lease Adj 68 86 132
EBITDA lease Adj margin (%) 6,9 6,5 8,5
Leasing payments 0 0 0
NOKm 2021 2022e 2023e
EBITDA 54 82 132
Net financial items -2 -5 -6
Paid tax -4 -7 -19
Non-cash items 0 0 0
Cash flow before change in WC 48 70 107
Change in WC 177 -57 -21
Operating cash flow 225 13 87
CAPEX tangible fixed assets -9 -6 -6
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 197 -61 0
Free cash flow 414 -55 81
Dividend paid -31 -36 -36
Share issues and buybacks -14 10 0
Other non cash items -227 -27 -16
Decrease in net IB debt -48 64 22
Balance Sheet (NOKm) 2021 2022 2023
Goodwill 125 39 39
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 255 137 118
Inventories 211 211 222
Receivables 176 272 296
Other current assets 31 31 31
Cash and liquid assets 174 75 105
Total assets 847 726 771
Shareholders equity 498 501 533
Minority 0 0 0
Total equity 498 501 533
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 114 144 157
Other current liabilities 168 181 181
Total liabilities and equity 847 888 933
Net IB debt -116 -21 -51
Net IB debt excl. pension debt -116 -21 -51
Capital invested 382 318 320
Working capital 136 190 211
EV breakdown 2021 2022 2023
Market cap. diluted (m) 1145 762 762
Net IB debt Adj -116 -21 -51
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 736 706
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 120,2 168 208,9
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 12,3 12,8
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) -23,3 -4,3 -9,6
Net debt / market cap (%) -9 -2,8 -6,7
Equity ratio (%) 58,9 69 69,1
Net IB debt adj. / equity (%) -23,3 -4,3 -9,6
Current ratio (%) 195,6 174,7 186,1
EBITDA / net interest (%) 3341,1 1522,1 2358,6
Net IB debt / EBITDA (%) -216,6 -25,9 -38,6
Interest cover (%) 1713,6 1007,7 1854,6
Lease liability amortisation 0 0 0
Other intangible assets 30 17 -2
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 -60 -89
Net IB debt / EBITDA lease Adj (%) -233,9 -69,2 -67,6
NOKm 2021 2022e 2023e
Shares outstanding adj. 44 45 45
Fully diluted shares Adj 44 45 45
EPS 4,3 0,81 1,51
Dividend per share Adj 0,8 0,8 0,9
EPS Adj 0,82 0,98 1,71
BVPS 11,23 11,16 11,87
BVPS Adj 7,73 9,92 11,04
Net IB debt / share -2,6 -0,5 -1,1
Share price 29,18 16,98 16,98
Market cap. (m) 1295 762 762
Valuation 2021 2022 2023
P/E 6 21 11,3
EV/sales 1,04 0,56 0,45
EV/EBITDA 19,1 9 5,3
EV/EBITA 37,2 13,5 6,8
EV/EBIT 37,2 15,1 7,6
Dividend yield (%) 3,1 4,7 5
FCF yield (%) 36,1 -7,2 10,7
P/BVPS 2,3 1,52 1,43
P/BVPS Adj 3,34 1,71 1,54
P/E Adj 31,5 17,4 9,9
EV/EBITDA Adj 15,1 8,5 5,3
EV/EBITA Adj 24,7 12,6 6,8
EV/EBIT Adj 24,7 14 7,6
EV/cap. employed 1,8 1,3 1,2
Investment ratios 2021 2022 2023
Capex / sales 0,9 0,5 0,4
Capex / depreciation 72,2 49,9 43,7
Capex tangibles / tangible fixed assets 46,2 31 27,8
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 24,9 42,4 -328,2
Depreciation on tangibles / tangibles 24,2 26,6 27,8
Lease adj. FCF yield (%) 36,1 -7,2 10,7

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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 8.8 % 8.8 % 29 Jun 2022
Nordnet Bank AB 5.4 % 5.4 % 29 Jun 2022
Sole Active AS 4.9 % 4.9 % 29 Jun 2022
Canaccord Genuity Wealth Management 4.5 % 4.5 % 31 Mar 2022
V. Eiendom Holding AS 4.1 % 4.1 % 29 Jun 2022
Quaero Capital S.A 3.2 % 3.2 % 31 Dec 2021
Nordnet Pensionsförsäkring 3.2 % 3.2 % 31 Jul 2021
Avanza Bank AB 2.8 % 2.8 % 29 Jun 2022
Georg Zetterberg 2.5 % 2.5 % 31 Jul 2021
Jan Ring 2.4 % 2.4 % 29 Jun 2022
Source: Holdings by Modular Finance AB