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Q-Free

Q-Free

Q-Free is a leading global supplier of intelligent transportation systems (ITS). The company operates in 15 different geographical markets and its operations are divided into tolling and traffic management. In the tolling segment, Q-Free provides hardware, software and services solutions for electronic toll collection (ETC). In the Traffic Management segment, Q-Free provides technology for the planning and control of traffic, including solutions for traffic signalling, software for inter-urban traffic management, as well as traffic counting and classification systems.

Q-Free operates in a market with competing technologies. While the company’s technology is currently established as a leading technology, new ones could emerge in the future. Note, however, that new technologies, such as satellite, would most likely be adopted in combination with an already established technology and that Q-Free’s technology in this case is expected to be used as an enforcement mechanism. Furthermore, Q-Free expects to deliver improved margins going forward, driven by an increased focus on ARR and investments in S&M. If most customers prefer upfront payments, this could affect margin expansion going forward.

NOKm 2021 2022e 2023e
Sales 860 944 1026
Sales growth (%) -3,3 9,8 8,7
EBITDA 106 118 137
EBITDA margin (%) 12,3 12,5 13,3
EBIT adj 50 64 76
EBIT adj margin (%) 5,8 6,8 7,4
Pretax profit 40 50 63
EPS rep 0,53 0,42 0,44
EPS growth (%) 214,7 -21 6,3
EPS adj 0,53 0,42 0,44
DPS 0 0 0
EV/EBITDA (x) 10 7,6 6,1
EV/EBIT adj (x) 20,9 14 11,1
P/E (x) 15,6 16,1 15,2
P/E adj (x) 15,6 16,1 15,2
EV/sales (x) 1,2 0,9 0,8
FCF yield (%) 5,7 2,8 10,9
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 1,3 1,3 0,7
Lease adj. FCF yield (%) 5,7 2,8 10,9
Lease adj. ND/EBITDA 1,3 1,3 0,7
NOKm 2021 2022e 2023e
EBITA margin (%) 5,8 6,8 7,4
EBIT margin (%) 5,8 6,8 7,4
Pretax margin (%) 4,6 5,3 6,1
Net margin (%) 6,8 4,9 4,8
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -3,3 9,8 8,7
EBITDA growth (%) 39,4 11,9 15,8
EBIT growth (%) 670,9 27,1 18,5
Net profit growth (%) 243 -21 6,3
EPS growth (%) 214,7 -21 6,3
Profitability 2021 2022 2023
ROE (%) 15,4 9,8 9,5
ROE Adj (%) 15,4 9,8 9,5
ROCE (%) 12,2 11,7 12,6
ROCE Adj(%) 12,2 11,7 12,6
ROIC (%) 13,2 9,5 9,2
ROIC Adj (%) 13,2 9,5 9,2
Adj earnings numbers 2021 2022 2023
EBITDA Adj 106 118 137
EBITDA Adj margin (%) 12,3 12,5 13,3
EBITDA lease Adj 106 118 137
EBITDA lease Adj margin (%) 12,3 12,5 13,3
EBITA Adj 50 64 76
EBITA Adj margin (%) 5,8 6,8 7,4
EBIT Adj 50 64 76
EBIT Adj margin (%) 5,8 6,8 7,4
Pretax profit Adj 40 50 63
Net profit Adj 59 46 49
Net profit to shareholders Adj 59 46 49
Net Adj margin (%) 6,8 4,9 4,8
Sales 860 944 1026
COGS -310 -362 -412
Gross profit 550 582 614
Other operating items -444 -464 -477
EBITDA 106 118 137
Depreciation and amortisation -55 -54 -61
Of which leasing depreciation 0 0 0
EBITA 50 64 76
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBIT 50 64 76
Net financial items -11 -13 -13
Pretax profit 40 50 63
Tax 19 -4 -14
Net profit 59 46 49
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 59 46 49
EPS 0,53 0,42 0,44
EPS Adj 0,53 0,42 0,44
Total extraordinary items after tax 0 0 0
Leasing payments 0 0 0
Tax rate (%) 48,2 -8,3 -22
Gross margin (%) 64 61,7 59,9
EBITDA margin (%) 12,3 12,5 13,3
NOKm 2021 2022e 2023e
EBITDA 106 118 137
Net financial items -11 -13 -13
Paid tax -3 -9 -14
Non-cash items 0 0 0
Cash flow before change in WC 92 96 110
Change in WC -5 -23 23
Operating cash flow 88 72 133
CAPEX tangible fixed assets -6 -6 -6
CAPEX intangible fixed assets -31 -46 -46
Acquisitions and disposals 0 0 0
Free cash flow 52 21 81
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Lease liability amortisation 0 0 0
Other non cash items 24 -15 -26
Balance Sheet (NOKm) 2021 2022 2023
Goodwill 288 313 313
Other intangible assets 135 160 166
Tangible fixed assets 90 76 62
Right-of-use asset 0 0 0
Total other fixed assets 7 6 6
Fixed assets 520 556 547
Inventories 86 131 125
Receivables 234 259 296
Other current assets 26 26 36
Cash and liquid assets 82 81 138
Total assets 948 1054 1142
Shareholders equity 448 495 545
Minority 0 0 0
Total equity 448 495 545
Long-term debt 202 194 194
Pension debt 0 0 0
Convertible debt 0 0 0
Leasing liability 0 0 0
Total other long-term liabilities 55 29 4
Short-term debt 19 36 36
Accounts payable 79 84 112
Other current liabilities 146 215 251
Total liabilities and equity 948 1054 1142
Net IB debt 139 149 92
Net IB debt excl. pension debt 139 149 92
Net IB debt excl. leasing 139 149 92
Capital invested 586 645 637
Working capital 121 117 94
EV breakdown 2021 2022 2023
Market cap. diluted (m) 914 745 745
Net IB debt Adj 139 149 92
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 1053 894 838
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 95,7 94,3 93,5
Working capital / sales (%) 15,6 12,6 10,3
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 30,9 30 17
Net debt / market cap (%) 15,4 20 12,4
Equity ratio (%) 47,2 47 47,7
Net IB debt adj. / equity (%) 30,9 30 17
Current ratio (%) 175,5 148,7 149,3
EBITDA / net interest (%) 986,9 880,8 1080,8
Net IB debt / EBITDA (%) 131,2 126 67,5
Net IB debt / EBITDA lease Adj (%) 131,2 126 67,5
Interest cover (%) 201,8 264,3 301,7
NOKm 2021 2022e 2023e
Shares outstanding adj. 111 111 111
Fully diluted shares Adj 111 111 111
EPS 0,53 0,42 0,44
Dividend per share Adj 0 0 0
EPS Adj 0,53 0,42 0,44
BVPS 4,02 4,45 4,9
BVPS Adj 0,66 0,7 1,09
Net IB debt / share 1,2 1,3 0,8
Share price 8,09 6,7 6,7
Market cap. (m) 900 745 745
Valuation 2021 2022 2023
P/E 15,6 16,1 15,2
EV/sales 1,22 0,95 0,82
EV/EBITDA 10 7,6 6,1
EV/EBITA 20,9 14 11,1
EV/EBIT 20,9 14 11,1
Dividend yield (%) 0 0 0
FCF yield (%) 5,7 2,8 10,9
Lease adj. FCF yield (%) 5,7 2,8 10,9
P/BVPS 2,04 1,5 1,37
P/BVPS Adj 12,46 9,64 6,14
P/E Adj 15,6 16,1 15,2
EV/EBITDA Adj 10 7,6 6,1
EV/EBITA Adj 20,9 14 11,1
EV/EBIT Adj 20,9 14 11,1
EV/cap. employed 1,6 1,2 1,1
Investment ratios 2021 2022 2023
Capex / sales 4,2 5,5 5,1
Capex / depreciation 65,1 95,3 84,8
Capex tangibles / tangible fixed assets 6,1 7,2 9,1
Capex intangibles / definite intangibles 35,3 44 41,9
Depreciation on intangibles / definite intangibles 64 51,7 55,5
Depreciation on tangibles / tangibles 0 0 0

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Q-Free - Company presentation with President & CEO Håkon Volldal

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