CREALOGIX Group — FY20 results slightly below forecasts, strong H2

CREALOGIX (SW: CLXN)

Last close As at 22/05/2024

124.50

0.00 (0.00%)

Market capitalisation

174m

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Research: TMT

CREALOGIX Group — FY20 results slightly below forecasts, strong H2

In its preliminary results, CREALOGIX announced a sales increase of 1.7% to CHF103.7m (FY19 CHF101.9m), 3.9% growth in constant currencies. As expected, there was an acceleration of growth in H220, 13.2% higher than H120, but revenues still fell c 1.7% short of our forecasts. Adjusted EBITDA of CHF2.4m was higher than in FY19 (CHF1.86m), although 6.8% off our EBITDA forecast of CHF2.58m. EBITDA excluded one-off provisions of CHF7.0m for streamlining business processes, unifying the product platform and a staff reorganisation, leading to job cuts of around 10% of headcount. After these provisions, the group reported an EBITDA loss of CHF4.6m. These measures are intended to accelerate the group’s transition to becoming a leading SaaS provider of digital banking platforms, with initial benefits from this investment expected to be seen in FY21, and a full year of benefit in FY22. Our forecasts (which exclude these exceptional items) remain unchanged pending the full-year results on 15 September 2020.

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TMT

CREALOGIX GROUP

FY20 results slightly below forecasts, strong H2

Preliminary results

Software & comp services

22 July 2020

Price

CHF90.6

Market cap

CHF127m

Net cash (CHFm) at 13 December 2019

3.8

Shares in issue

1.4m

Free float

39.6%

Code

CLXN

Primary exchange

Switzerland

Secondary exchange

N/A

Share price performance

Business description

The CREALOGIX Group is a Swiss Fintech 100 company and is among the global market leaders in digital banking, providing front-end digital banking technology solutions to banks, wealth managers and other financial services companies.

Analysts

Richard Williamson

+44 (0)20 3077 5700

Katherine Thompson

+44 (0)20 3077 5730

CREALOGIX Group is a research client of Edison Investment Research Limited

In its preliminary results, CREALOGIX announced a sales increase of 1.7% to CHF103.7m (FY19 CHF101.9m), 3.9% growth in constant currencies. As expected, there was an acceleration of growth in H220, 13.2% higher than H120, but revenues still fell c 1.7% short of our forecasts. Adjusted EBITDA of CHF2.4m was higher than in FY19 (CHF1.86m), although 6.8% off our EBITDA forecast of CHF2.58m. EBITDA excluded one-off provisions of CHF7.0m for streamlining business processes, unifying the product platform and a staff reorganisation, leading to job cuts of around 10% of headcount. After these provisions, the group reported an EBITDA loss of CHF4.6m. These measures are intended to accelerate the group’s transition to becoming a leading SaaS provider of digital banking platforms, with initial benefits from this investment expected to be seen in FY21, and a full year of benefit in FY22. Our forecasts (which exclude these exceptional items) remain unchanged pending the full-year results on 15 September 2020.

Year end

Revenue (CHFm)

PBT*

(CHFm)

EPS*
(CHF)

DPS
(CHF)

P/E
(x)

Yield
(%)

06/18

87.1

5.0

2.39

0.25

37.9

0.3

06/19

101.9

(1.7)

(0.94)

0.00

NM

N/A

06/20e

105.5

(0.5)

(0.27)

0.00

NM

N/A

06/21e

111.1

1.6

0.83

0.25

108.8

0.3

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Investment and reorganisation to drive sales growth

The purpose of the reorganisation is to accelerate the group’s transformation, standardising the product portfolio and establishing a segment-oriented, go-to-market strategy. CREALOGIX will also invest in its sales function, to deliver additional revenues from existing core markets, as well as focusing on the opportunity in the Asia-Pacific region. In parallel, management intends to expand the group’s global partner network.

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