Crayon Group Holding ASA: Financial results for Q1 2020

Sa2ri
CRAYON 12.05.2020 kl 07:51 4022

Crayon Group Holding ASA: Financial results for Q1 2020

Oslo, 12 May 2020: Crayon Group Holding ASA ("Crayon" or the "Company", OSE ticker code "CRAYON") reports the ninth consecutive record-breaking financial quarter, with double-digit year-over-year ("YoY") organic revenue and gross profit growth across all business areas and market clusters, including the best-ever Q1 performance in the Nordics. Q1 2020 revenue growth was 59% and gross profit growth was 30% compared to Q1 2019.
Adjusted EBITDA in Q1 2020 increased by NOK 5m (compared to Q1 2019) to NOK 41m.

Financial Key figures for Q1 2020:
- Revenue of NOK 4,204m in Q1 2020, 59% growth from NOK 2,639m in Q1 2019
- Gross profit of NOK 515m in Q1 2020, 30% growth from NOK 395m in Q1 2019
- Adjusted EBITDA of NOK 41m in Q1 2020, NOK +5m from NOK 36m in Q1 2019

The interim financial report and presentation for Q1 2020 are enclosed. The report, presentation, and webcast of the presentation will be made available at https://www.crayon.com/en/about-us/investor-relations/

For further queries, please contact:
Torgrim Takle, Chief Executive Officer
Crayon Group Holding ASA
Tel.: +47 95 14 07 82
Email: torgrim@crayon.com

Magnus Hofshagen, VP Corporate Development & IR
Crayon Group Holding ASA
Tel.: +47 48 49 91 95
Email: magnus.hofshagen@crayon.com

About Crayon

Crayon Group Holding ASA is a leading IT advisory firm in software and digital transformation services. With unique IP tools and skilled employees, Crayon help optimize its clients' ROI from complex software technology investments. Crayon have long experience within volume software licensing optimization, digital engineering, predictive analytics and assists the clients through all phases of the process of a digital transformation. Headquartered in Oslo, Norway, the company has approximately 1,500 employees in 50 offices worldwide.

https://newsweb.oslobors.no/message/505218
Redigert 20.01.2021 kl 05:56 Du må logge inn for å svare
Sa2ri
12.05.2020 kl 08:31 3924

Fra DnB sin morgenrapport:

"Crayon inngår i vår ukentlige portefølje med anbefalte aksjer. Kursen steg i går med 2% i forkant av dagens kvartalstall og lå ved stengetid på NOK 59.40 pr aksje. Fasiten for årets første tre måneder viser en brutto inntjening på NOK 515 mill mot vårt estimat på NOK 450 mill og konsensus på NOK 460 mill. Justert EBITDA for perioden kom inn på NOK 41 mill mot vårt estimat og konsensus på henholdsvis NOK 46 mill og NOK 44 mill. Selskapet avholder en presentasjon av rapporten, utviklingen så langt for Q2 og de videre utsiktene kl. 08.30 i dag. Vi har før eventuelle endringer på grunnlag av dagens rapport en kjøpsanbefaling og kursmål på NOK 75 pr aksje."
Sa2ri
12.05.2020 kl 08:45 3839

Her er også en oppdatering fra ARC:

"Crayon Group ASA

Recommendation: Buy · Target Price: NOK75.0 · Current Share Price: NOK 58.0
Q1: Strong gross profit growth

Strong gross profit at NOK 515m (estimates at NOK 460m) - up +30% y-y
EBITDA adj. for bad debt revisions at NOK 50m (est. at USD 44m)
... bad debt revisions (IFRS9) impacting EBITDA negatively by NOK 11m
Maintains 2020 and mid-term targets unchanged

Q1 results: Strong gross profit growth

Crayon reported a strong gross profit at NOK 515m, up 30% y-y (12% above consensus at NOK 460m and Arctic at NOK 450m). EBITDA adj. was slightly below estimates at USD 39m (vs. consensus at NOK 44m and Arctic at NOK 43m) due to bad debt revisions at NOK 11m and increased opex in US and Europe. EBITDA adj. would have been NOK 50m adjusted for bad debt revisions (does not necessarily mean that customers haven't paid in Q1 but a risk that customers can be late/default (forward looking information -> macro indicators down -> expected defaults up = higher upfront provisions)). Due to higher D&A and net financial costs (FX effects), net profit was below estimates. Operational cash flow was stronger than expected due to net working capital.
Solid gross profit growth in all segments

All segments reported stronger gross profit than expected. Especially Nordics should be a relief after modest Q4 growth, with gross profit growth at 24% y-y. EBITDA in Europe and US were weaker than expected due to increased opex.
Outlook maintained

Crayon has seen limited impact from Covid-19 as of now, and believes it accelerates the digital transformation. The company maintains its 2020 targets of i) 15-20% gross profit growth, ii) 17-18% adjusted EBITDA as share of gross profit and iii) -10 - -15% NWC and capex at NOK 70m. Its mid-term targets are also unchanged at 10-15% gross profit growth. On our estimates Crayon trades at 14x 2021 EBITDA and 19x 2021 P/E. We value Crayon's Nordic business at 62/share, implying 11x 2021 EBIT or 3.8x 2021 EV/Gross profit, broadly in-line with closest peers.

Arctic Securities AS

Henriette Trondsen"
Sa2ri
12.05.2020 kl 08:48 3817

Og til slutt en oppdatering fra Petter Kongsli i SB1M:

"CRAYON (Buy tp NOK70): The coronavirus is moving the world to the cloud with 25% YoY currency neutral gross profit growth in 1Q20

Newsflash

SB1M was mandated in the recent bond issue in Crayon

Crayon Group ASA | CRAYON NO

1Q20: The coronavirus is moving the world to the cloud with ~25% YoY currency neutral gross profit growth in 1Q20

Conclusion

Earlier this morning, Crayon announced its 1Q20 figures where we argue 1) gross profit growth and fall-through to EBITDA, 2) FCF and 3) outlook is the key KPI's to follow. YoY gross profit growth ended at 30% reported and 25% currency neutral, which is rock-solid vs. the underlying market at 10-15% and our 16% estimate – driven by the fact that Coid-19 is moving the world to the cloud in all regions. Still, EBITDA reported ended at NOK38.5m vs. our NOK43m estimate driven by a significant increase in allowance for doubtful accounts (NOK10m) due to precautionary measures on the back of Covid-19, and adjusted for this EBITDA ended at close to NOK50 (no net currency effect on EBITDA). Indeed, according to our understanding, Crayon has never had above NOK5m in losses on receivables in a year (NOK3m in 2019). Favorable working capital took FCF to ~NOK100m, up from minus NOK268m in the same period last year, leading to a reported net cash position. Therefore, the outlook for 2020 was reiterated. Bottom line; the most important KPI for us is the underlying currency neutral gross profit growth (25%) as it underlines the operational momentum in the company and we view higher accounting losses on receivables as a one-off and argue Crayon continue to harvest the vintage curve and expect to make limited estimate changes to our EBITDA rep. and some to EBIT on higher depreciation. We therefore expect Crayon to perform in line with the market today with strong performance ahead of the figures. For more details, investment case and valuation, see below.

The most important KPI in the report, gross profit growth, came in at NOK515m, 12% above our NOK459m estimate driven by solid outperformance in all regions. This correspond to a reported YoY gross profit growth of 30% and some 25% adjusted for currency and underlines the operational momentum Crayon has and is experiencing with the world moving to the cloud.

Still, EBITDA reported ended at NOK38.5m vs. our NOK43. This is primarily related to a significantly increase in net accounting losses on receivables with "allowance for doubtful accounts" (see Note 12) increasing by NOK10m vs the same period last year to take a cautious stance towards potential effects from Covid-19 on some counterparts (40% of revenues comes form public sector and majority of the remaining is from large corporate customers. Moreover, around 1% of accounts receivables to private sector customers are considered as high-risk industries such as travel and transport, of personnel, accommodation, hospitality and leisure). Nevertheless, adjusted for this effect, EBITDA ended at closer to NOK50m. Below EBITDA, non-cash amortization and foreign currency losses effect EBIT and net income.

With capex in line, FCF ended at NOK99m, up from minus NOK268m in the same period last year and vs. our negative NOK237m estimate. This is related to working capital, which came in at minus NOK394m vs. our minus NOK101.6m estimate, taking reported NIBD to a net cash position of NOK13m vs. our expectations of a net debt position of NOK350m.

Therefore, the outlook for 2020 was reiterated.

Crayon (Buy tp NOK70): Coronavirus is moving the world to the cloud

Underlying software and services market, which grows between 10-15% annually globally; i) Microsoft teams hits 44m daily active users due to corona, spiking 37% in one week amid remote work surge, ii) Cisco reported that traffic on its WebEx video conferencing services increased 22x in China and iii) Cloudfare's US data centers served up 20% more internet traffic than usual when Trump announced a state of emergency on March 13.

Countercyclical earnings structure with i) 40% contractual and 20% frame agreements (total 60%) – typically 3-5 years managed services agreements within Services (50% of EBITDA) and ii) 50% contractual and 15% frame agreements (65% total) – typically 3y agreements within Software (50% of EBITDA). EPS in Nordic peer Atea declined 8% during the 2008/2009 recession.

Assuming 10x normalized EV/EBITDA on the Nordic operation on current 2020 estimates, the international operation, that has NOK776m in gross profit vs. NOK1045m in the Nordics, is close to free. Keep in mind that with the weakening of the NOK, the net present value of the international expansion in Crayon, in NOK, has become even higher.

Trades at 20e and 21e EV/EBIT of 17.5x and 11.4x before estimate any estimate changes on the back of 1Q20 and has trailing 12m NIBD/EBITDA of ~0.2x with negative working capital and capex that does not scale with growth (primarily capitalized R&D hours).

Crayon also trades at a discount to key peer SoftwareOne based on consensus estimates (see peer table below). EV/EBIT the most relevant valuation metric to account for differences in capex needs (share of proprietary IP and hence, capitalized R&D).

Best regards
Petter Kongslie
Equity Analyst"
Hobbit
12.05.2020 kl 16:21 3566

Dette ser lovende ut.
Sa2ri
13.05.2020 kl 11:07 3370

ARC hever kursmålet og er ute med en anbefaling i dag. De skriver blant annet følgende:

"Crayon Group ASA

Recommendation: Buy · Target Price: NOK83.0 (75.0) · Current Share Price: NOK 59.4

Q1: Full speed ahead

Crayon reported strong gross profit growth at 24% y-y, of which a progress in the Nordics was a relief after Q4. This was more important than increased opex dragging down profitability, which was partly due to bad debt provisions (pre-cautionary measure) while its FY margin targets remain unchanged. Crayon remains attractively positioned in the current crisis. We maintain our Buy rating and adjust our SOTP-based target price to NOK 83 (75) due to the Nordics.

Strong gross profit growth
Crayon's gross profit grew by 24% y-y (FX adjusted) and ended at NOK 515m (estimated NOK 460m) driven by solid growth in all business areas. Due to i) increased opex and ii) bad debt provisions at NOK 11m (IFRS 9 precautionary measure on risk of late /defaulting customer payment), EBITDA was slightly below expectations. Net profit was dragged down by net financials and higher D&A. Operational cash flow was solid due to positive net working capital, but this was partly driven by factoring.

Limited impact from Covid-19 and increased profitability expected
Crayon has seen limited impact on its business from COVID-19 and we view it as structurally better positioned than relevant peers (i.e. no hardware exposure). Although some deferral of contracts could occur, especially within APAC&MEA, its recurring software business (~60% of revenues) and share of public counterparties (40% of customers) should give some support. We expect improved profitability in the coming months, also supported by the reiterated margin targets – with more markets contributing to profitability.

Attractive valuation
Our target price of NOK 83 implies valuing the Nordic business (~121% of EBITDA and ~55% of gross profit) at NOK 67/share (11x 2021 EBITDA or 3.8x gross profit/EBITDA). This justifies more than the current valuation. We value the remaining markets (~45% of gross profit) at a conservative 1.6x EV/ gross profit.

Arctic Securities AS

Henriette Trondsen"
3fotsyken
26.05.2020 kl 08:54 3065

Hvordan skal vi tolke dette? Innsidere selger... Crayon Group vil gjennomføre en rettet emisjon med et proveny på 300 millioner kroner, tilsvarende 5,7 prosent av aksjekapitalen basert på nåværende aksjepris-nivåer, ifølge en børsmelding.

Videre vil Karbon Invest AS, eid av Jens Rugset som er styreleder i Crayon, og grunnlegger Rune Syversen, selge opptil tre millioner aksjer, tilsvarende en tredjedel av aksjebeholdningen i selskapet og 3,9 prosent av utstående aksjer, ifølge TDN Direkt.

Selgeren vil være en langsiktig aksjonær i selskapet, men vil bruke denne muligheten til å sikre finansiering til andre initiativer og balansere beholdningen på tvers av porteføljen.

Resterende aksjer vil ha en lock-up på 180 dager.
AlfaQ
26.05.2020 kl 08:59 3036

Flirte litt når jeg leste denne igår.
Har ikke satt meg inn i Crayon, og kjenner ikke selskapet.
Men meldingen isolert sett er jo ikke særlig tillitsvekkende.
Styreleder og grundere deltar ikke i emisjonen og lar seg vanne ut. Men ikke nok med det, de vil også dumpe et stort antall aksjer.
Hva man i gamle dager kalte et salgssignal.
ruda
03.06.2020 kl 07:51 2693

Gjelsten gjorde det samme i KID, og han fikk rosende omtale
ruda
07.06.2020 kl 16:45 2514

Tror på mangedobling
– Vi er såre fornøyd med den strategien vi har lagt for Crayon. Vi har kontorer i 40–50 land, og vokser mer enn konkurrentene. Det har vi tenkt å fortsette med. Vi er veldig opportunistiske, sier Rugseth, som er styreleder i børsnoterte Crayon Group Holding.