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Claranova — Q2 boosted by Personal Creations contribution

Claranova (PAR: CLA)

Last close As at 05/08/2026

EUR0.61

▲ −0.02 (−3.17%)

Market capitalisation

EUR35m

More on this equity

Research: TMT

Claranova — Q2 boosted by Personal Creations contribution

Claranova reported 19% underlying growth for H120, further boosted by a strong contribution from the recently acquired Personal Creations. The Mobile business continues its expansion across Europe, while the Internet business is focused on increasing the level of recurring revenues. We have revised our forecasts to reflect higher revenues offset by higher levels of investment in FY20 and FY21.

Written by

Katherine Thompson

Director

TMT

Claranova

Q2 boosted by Personal Creations contribution

Q220 revenue update

Software & comp services

13 February 2020

Price

€7.67

Market cap

€301m

$1.09/€

Net cash (€m) at end FY19

23.6

Shares in issue

39.2m

Free float

91.3%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(0.6)

(6.2)

18.5

Rel (local)

(2.1)

(9.3)

(1.4)

52-week high/low

€9.30

€6.44

Business description

Claranova consists of three businesses focused on mobile and internet technologies: Mobile (digital photo printing), Internet (consumer software) and Internet of Things (IoT). Its headquarters are in Paris, and it has operations in Europe, the US and Canada.

Next events

H120 results

31 March 2020

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

Claranova reported 19% underlying growth for H120, further boosted by a strong contribution from the recently acquired Personal Creations. The Mobile business continues its expansion across Europe, while the Internet business is focused on increasing the level of recurring revenues. We have revised our forecasts to reflect higher revenues offset by higher levels of investment in FY20 and FY21.

Year end

Revenue (€m)

EBITDA
(€m)

PBT*
(€m)

Diluted EPS*
(€)

DPS
(€)

P/E
(x)

06/18

161.5

3.9

3.1

0.06

0.0

121.6

06/19

262.3

16.0

12.0

0.25

0.0

31.1

06/20e

419.1

25.2

21.6

0.30

0.0

25.4

06/21e

497.0

35.6

32.0

0.47

0.0

16.4

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

Initial integration of Personal Creations complete

Claranova reported H120 revenue growth of 68% y-o-y; once the €63.9m contribution from Personal Creations is excluded, organic growth was 22% or 19% on a constant currency basis. The Mobile division saw underlying constant currency growth of 22% and noted that the first phase of the integration of Personal Creations was complete. The Internet business grew 12% y-o-y on a constant currency basis; growth slowed in Q2 as the division focused on shifting more licensing onto a subscription basis. The IoT division grew 24% y-o-y on a constant currency basis, and saw non-Sprint related revenues grow 50% y-o-y.

Estimates revised to reflect Q2 performance

We have increased our revenue forecasts for the Mobile business, reflecting a higher than expected contribution from Personal Creations. We have slightly reduced our Internet division forecasts, reflecting slower growth in Q2. As the company commented on higher levels of investment in both businesses, we have reduced our EBITDA forecast for FY20 by 12.3% and for FY21 by 2.2%.

Valuation: Upside potential based on sum-of-parts

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €15.93 per share. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, we calculate a more realistic valuation of €13.34 per share (down from €13.74). Factors that could provide upside to our forecasts include faster than expected growth of the Internet business (which, in turn, is likely to lead to better profitability), returning Personal Creations to profitability, launch of the PayAware solution and distributors selling myDevices in the US and China.

Revenue update

Exhibit 1: Divisional revenues

Revenues (€m)

H120

H119

y-o-y

y-o-y

y-o-y

Q220

Q219

y-o-y

Reported

Organic

Constant currency organic

Reported

Mobile

186.2

97.8

90%

25%

22%

137.7

67.4

104%

Internet

45.9

40.1

14%

14%

12%

25.1

23.2

8%

IoT

2.2

1.7

28%

28%

24%

1.7

0.8

113%

Total

234.3

139.6

68%

22%

19%

164.5

91.4

80%

Source: Claranova

Mobile – strong Q2 for Personal Creations

In the Mobile division, Personal Creations (PC) generated revenues of €63.9m for H120, split as €8.5m in Q120 and €55.4m in Q220. This was the first full quarter for PC under Claranova ownership (consolidated from 1 August 2019). Based on data provided by the previous owner of PC, the business typically generates c 50% of annual revenues in the December quarter. The company noted that it had completed the first phase of integration, which included relocating the team, pooling some back office functions, and a strategic review of the product portfolio. The next phase of integration will be focused on the technical and commercial integration of PC with the existing Mobile business.

With revenues of €122.3m in H120, the original PlanetArt business saw revenue growth of 25% yoy (22% constant currency). Q220 revenues were 22% higher y-o-y (Q120: +32%). During Q220, the FreePrints and FreePrints Photobooks apps were launched in Poland and Austria. Based on a market survey commissioned by the company, FreePrints gained market share in the UK, the US and France during H1.

Internet – continuing the shift to subscription licensing

The Internet business saw revenue growth of 14% y-o-y in H120, or 12% on a constant currency basis. For Q220, reported revenue growth was 8% y-o-y (Q120: +23%). The global integration of the businesses acquired in mid-2018 has been completed. The business continues to shift software licensing from one-off to subscription – the company noted that this shift has required investment that directly affects short-term growth and profitability.

In October 2019, the company announced that it intended to buy out the minority interests in the Internet division. At the AGM in December, a quorum of shareholders was not achieved, so the resolution approving the deal could not be passed. The company continues to negotiate with the minority shareholders.

IoT – new ‘No Dead Zone’ product launched

The IoT division saw revenue growth of 28% y-o-y in H120, or 24% on a constant currency basis. For Q220, the division reported growth of 113%. The company noted that during H120, Sprint contributed €1.0m of revenue (H119: €0.9m). This implies that revenues from other customers totalled €1.2m in H120, up from €0.8m in H119.

The IoT business recently launched a new solution for use in US hotels – the ‘No Dead Zone’ panic button. The device works across multiple networks (cellular, Bluetooth, Wi-Fi, LoRaWAN) ensuring that wherever the employee is in the building, the signal from the device can be received. The target market for the device is hotels signed up to the five-star promise, a US initiative that aims to enhance employee safety. Certain US states (New Jersey, Illinois) and cities (New York, Seattle, Chicago, Miami, Santa Monica) require hotels to provide employees with panic buttons. As the device has only just been launched, it will start to contribute revenues in H220.

Changes to forecasts

We have revised our forecasts to reflect a stronger than expected contribution from Personal Creations and a slightly weaker contribution from the Internet business. We have also reduced EBITDA to reflect comments on investment during H120, primarily in the Internet division.

Exhibit 2: Changes to estimates

€m

FY20e

FY20e

FY21e

FY21e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

411.1

419.1

1.9%

59.8%

488.8

497.0

1.7%

18.6%

EBITDA

28.8

25.2

(12.3%)

57.8%

36.4

35.6

(2.2%)

41.0%

EBITDA margin

7.0%

6.0%

(14.0%)

(0.1%)

7.4%

7.2%

(3.8%)

1.1%

Normalised operating profit

28.3

24.7

(12.5%)

59.7%

35.9

35.1

(2.2%)

41.8%

Normalised operating profit margin

6.9%

5.9%

(1.0%)

(0.0%)

7.3%

7.1%

(0.3%)

1.2%

Reported operating profit

24.8

21.2

(14.3%)

86.4%

32.4

31.6

(2.5%)

48.7%

Reported operating margin

6.0%

5.1%

(1.0%)

0.7%

6.6%

6.4%

(0.3%)

1.3%

Normalised PBT

25.2

21.6

(14.1%)

80.2%

32.8

32.0

(2.4%)

47.9%

Reported PBT

21.7

18.1

(16.4%)

(148.1%)

29.3

28.5

(2.7%)

57.1%

Normalised net income

13.3

12.1

(9.2%)

22.7%

19.1

18.7

(2.1%)

55.1%

Reported net income

10.6

9.4

(11.5%)

(123.0%)

15.7

14.9

(5.0%)

59.0%

Normalised basic EPS (€)

0.34

0.31

(9.2%)

22.7%

0.49

0.48

(2.1%)

55.1%

Normalised diluted EPS (€)

0.33

0.30

(9.2%)

22.7%

0.48

0.47

(2.1%)

55.1%

Reported basic EPS (€)

0.27

0.24

(11.5%)

(123.0%)

0.40

0.38

(5.0%)

59.0%

Net debt/(cash)

(26.1)

(24.7)

(5.2%)

4.8%

(58.7)

(56.3)

(4.1%)

127.8%

Source: Edison Investment Research


Exhibit 3: Financial summary

€m

2015

2016

2017

2018

2019

2020e

2021e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

93.1

117.4

130.2

161.5

262.3

419.1

497.0

EBITDA

 

 

(6.8)

(9.2)

(5.0)

3.9

16.0

25.2

35.6

Normalised operating profit

 

 

(11.4)

(16.0)

(5.8)

3.4

15.5

24.7

35.1

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

(1.5)

(1.5)

(1.5)

Exceptionals

15.6

(10.0)

0.4

(2.4)

(2.9)

0.0

0.0

Share-based payments

(0.0)

(0.1)

(4.8)

(7.1)

0.3

(2.0)

(2.0)

Reported operating profit

4.2

(26.1)

(10.1)

(6.1)

11.4

21.2

31.6

Net Interest

1.1

(1.7)

(0.9)

(0.3)

(3.5)

(3.1)

(3.1)

Joint ventures & associates (post tax)

0.0

(0.0)

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

(45.6)

0.0

0.0

Profit Before Tax (norm)

 

 

(10.3)

(17.7)

(6.6)

3.1

12.0

21.6

32.0

Profit Before Tax (reported)

 

 

5.3

(27.8)

(11.0)

(6.4)

(37.7)

18.1

28.5

Reported tax

(0.6)

(0.8)

(0.4)

(1.8)

(3.7)

(4.2)

(6.5)

Profit After Tax (norm)

(10.9)

(18.5)

(7.0)

2.4

9.2

16.6

25.7

Profit After Tax (reported)

4.7

(28.6)

(11.4)

(8.2)

(41.4)

14.0

21.9

Minority interests

(8.1)

0.0

0.3

0.2

0.6

(4.6)

(7.0)

Discontinued operations

(3.2)

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.9)

(18.5)

(6.7)

2.6

9.8

12.1

18.7

Net income (reported)

(6.5)

(28.6)

(11.0)

(7.9)

(40.8)

9.4

14.9

Basic average number of shares outstanding (m)

6

38

38

39

39

39

39

EPS - basic normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.07

0.25

0.31

0.48

EPS - diluted normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.06

0.25

0.30

0.47

EPS - basic reported (€)

 

 

(1.13)

(0.76)

(0.29)

(0.20)

(1.04)

0.24

0.38

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

26.1

10.9

24.0

62.4

59.8

18.6

EBITDA Margin (%)

-7.3

-7.9

-3.8

2.4

6.1

6.0

7.2

Normalised Operating Margin

-12.3

-13.7

-4.4

2.1

5.9

5.9

7.1

BALANCE SHEET

Fixed Assets

 

 

15.7

3.0

2.0

1.3

75.1

89.8

88.3

Intangible Assets

12.0

1.5

0.9

0.5

69.9

84.5

82.9

Tangible Assets

0.6

0.5

0.3

0.2

1.4

1.5

1.6

Investments & other

3.1

1.1

0.7

0.6

3.8

3.8

3.8

Current Assets

 

 

48.0

25.5

28.1

79.1

100.9

111.8

148.3

Stocks

5.9

5.0

3.7

3.7

4.8

7.7

9.1

Debtors

4.8

4.7

4.3

4.9

11.6

18.5

22.0

Cash & cash equivalents

30.5

11.1

17.1

65.7

75.4

76.5

108.1

Other

6.9

4.7

2.9

4.8

9.1

9.1

9.1

Current Liabilities

 

 

(32.0)

(25.3)

(28.1)

(37.2)

(60.5)

(70.1)

(81.2)

Creditors

(26.9)

(24.5)

(26.6)

(35.4)

(54.8)

(64.4)

(75.5)

Tax and social security

(0.3)

(0.0)

(0.3)

(1.7)

(3.0)

(3.0)

(3.0)

Short term borrowings

(4.8)

(0.7)

(1.1)

(0.1)

(2.7)

(2.7)

(2.7)

Other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(2.4)

(1.1)

(0.7)

(29.0)

(52.0)

(52.0)

(52.0)

Long term borrowings

(1.8)

(0.6)

0.0

(28.1)

(49.1)

(49.1)

(49.1)

Other long term liabilities

(0.7)

(0.5)

(0.7)

(0.9)

(2.9)

(2.9)

(2.9)

Net Assets

 

 

29.3

2.1

1.3

14.2

63.6

79.5

103.4

Minority interests

0.0

0.0

(0.1)

(1.8)

(11.0)

(15.6)

(22.6)

Shareholders' equity

 

 

29.3

2.1

1.2

12.5

52.6

63.9

80.8

CASH FLOW

Op Cash Flow before WC and tax

(6.8)

(9.2)

(5.0)

3.9

16.0

25.2

35.6

Working capital

0.4

2.5

6.8

7.9

(4.1)

14.3

6.2

Exceptional & other

(3.8)

(4.3)

(2.2)

(5.7)

(5.2)

0.0

0.0

Tax

0.3

(0.3)

(0.0)

(1.2)

(3.8)

(4.2)

(6.5)

Net operating cash flow

 

 

(9.8)

(11.3)

(0.4)

5.0

3.0

35.4

35.2

Capex

(4.4)

(0.9)

(0.2)

(0.1)

(2.5)

(0.5)

(0.5)

Acquisitions/disposals

10.8

(0.4)

3.6

14.2

(13.3)

(30.7)

0.0

Net interest

(0.9)

(0.1)

(0.0)

(0.3)

0.0

(3.1)

(3.1)

Equity financing

33.2

(5.1)

1.9

2.0

(1.4)

0.0

0.0

Dividends

0.0

2.0

0.0

0.0

0.0

0.0

0.0

Other

0.1

0.1

0.1

(0.6)

0.0

0.0

0.0

Net Cash Flow

29.0

(15.7)

5.0

20.1

(14.2)

1.1

31.6

Opening net debt/(cash)

 

 

18.0

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(24.7)

FX

0.1

(0.1)

(0.6)

0.4

0.3

0.0

0.0

Other non-cash movements

12.6

1.7

1.8

1.1

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(24.7)

(56.3)

Source: Claranova, Edison Investment Research


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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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