Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
CREALOGIX has established a strong track record of delivering software solutions to the banking industry in Switzerland and it is transitioning the business to the international markets. FY18 numbers were below our expectations, mainly due to the faster-than-anticipated switch to SaaS, which spreads out revenue. International revenues represent 57% of the total (50% in FY17). CREALOGIX acquired the 80% remainder of Elaxy BS&S in July and acquired Innofis to target the Middle Eastern markets earlier this year. The stable, cash-generative nature of Elaxy BS&S balances the higher-risk, stronger growth profile of Innofis. Given the attractive industry dynamics and with CREALOGIX ideally positioned to capitalise on these, the shares look attractive on c 22x our FY20 EPS.
Written by
CREALOGIX Group |
Software & comp services |
Share price graph
Share details
Business description
Bull
Bear
Analysts
CREALOGIX Group is a research client of Edison Investment Research Limited |
International revenues rise to 57%
CREALOGIX has established a strong track record of delivering software solutions to the banking industry in Switzerland and it is transitioning the business to the international markets. FY18 numbers were below our expectations, mainly due to the faster-than-anticipated switch to SaaS, which spreads out revenue. International revenues represent 57% of the total (50% in FY17). CREALOGIX acquired the 80% remainder of Elaxy BS&S in July and acquired Innofis to target the Middle Eastern markets earlier this year. The stable, cash-generative nature of Elaxy BS&S balances the higher-risk, stronger growth profile of Innofis. Given the attractive industry dynamics and with CREALOGIX ideally positioned to capitalise on these, the shares look attractive on c 22x our FY20 EPS.
Digital banking remains in a strong growth phase
CREALOGIX develops software solutions that enable digital banking for ‘the digital bank of tomorrow’. The solutions are most often used by traditional banks to enable their journey to digitalisation. Digital banking is in a major growth phase globally, boosted by the advent of smartphones and tablets and the pressure on banks to streamline their branches to reduce costs. These factors are driving increasing spend on front-end systems with global spend forecast to rise to c 50% of banks’ total IT budgets by 2020, according to Gartner, from c 10% in 2010.
FY18: Local currency revenue growth was 13.1%
FY18 revenues grew 13.1% at constant currencies (guidance was 10–15%) to CHF87.1m, while EBITDA eased by 3.8% to CHF7.0m. All new business in Germany has been recurring; had it been on a traditional licence basis, revenues would have been CHF3.8m higher. This was due to a greater-than-anticipated switch to SaaS, which meant the 8.1% EBITDA margin was below the >10% management guidance. We have broadly maintained our forecasts, having cut them following the pre-announced trading in August.
Valuation: Significant upside if targets are reached
A DCF scenario incorporating 10% organic revenue CAGR over 2019–29e falling thereafter to 2%, operating margins tapering up to a level of 15% from FY22e along with a 9% WACC, would suggest a per-share valuation of CHF217, 60% above the current share price. Increasing the margin target to 20% lifts the valuation to CHF284, whereas reducing the margin to 10% cuts it to CHF150. These valuations are after the dilution impact from the outstanding convertible bonds.
|
Edison estimates
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments |
|
|
All for One Steeb is the largest SAP solutions supplier in the German speaking mid-market segment and a major multi-cloud service provider. The group is achieving steady double-digit top-line growth and has invested heavily to profit from strong demand for cloud transformation services. Growing recurring revenues also support future margin growth. Management recently confirmed increased earnings guidance, despite the adverse impact on EBIT of restructuring costs and high staff investments in 9M18. The stock trades at a 16% PER discount to its eurozone peers.