Report

Update following the Q1 17 results (Keyware)

Update following the Q1 17 results

EPS CHANGE

CHANGE IN EPS2017 : € 0.24 vs 0.26 -5.57%
2018 : € 0.25 vs 0.28 -9.27%
Following the Q1 17 results, we have updated our forecasts for the coming years. Our top-line estimate for 2017 is downgraded from €20.7m to €20.2m, mainly due to a cut in the Terminals business (-7.2% yoy vs. -3% previously) in the light of a difficult Q1. In addition, we now see growth of 9.7% in 2018 vs. 12.2% previously, in order to reflect a progressive recovery in the Terminals business.

Despite improvements in both segments, the bottom-line mechanically suffers from the higher share of Authorisations in the mix, for which the gross margin is much lower than Terminals.

CHANGE IN DCF€ 2.48 vs 2.78 -10.9%
The DCF is negatively impacted by the top-line downgrade, which translates into a lower cash generation, despite unchanged long-term parameters.
Underlying
Keyware Technologies N.V.

Keyware Technologies NV. Keyware Technologies NV is a Belgium-based independent network service provider that offers electronic payment solutions. It is engaged in the: personalization, programming, installation, maintenance, rental and sale of fixed, portable and mobile payment terminals; implementation of payment transactions using Visa, MasterCard, Maestro, Amex, V-Pay, and JCB, among others; payment services for electronic-commerce and mobile-commerce; solutions for loyalty cards, as well as development and management of its payment transaction platform. The Company operates in two segments: Payment Terminals, engaged in the rental of terminals, the sale of payment terminals, installation of payment terminals, revenues related helpdesk and revenues relating to on-site interventions, as well as Payment Authorization, engaged in income related payment transactions and authorization services, transaction management for third parties, as well as loyalty processing and analysis services, among others.

Provider
AlphaValue Corporate Services
AlphaValue Corporate Services

AlphaValue Corporate Services capitalise on the research and credit analysis expertise deployed by AlphaValue with major institutional investors at European level over the past nine years. The proprietary tools and processes enabling AlphaValue Corporate Services to establish a valuation and/or a credit risk assessment are identical to those used by AlphaValue to the benefit of its institutional clients. The only difference is the recognition that a company evaluation cannot be dissociated from the fact that the latter is paying for the service (AlphaValue Corporate Services), as opposed to the investor footing the bill (AlphaValue). AlphaValue’s research tools are characterised by the transparency of the valuation methodologies, their responsiveness to market data and by nine years’ experience of a universe numbering more than 450 European companies. Through its coverage and sector exhaustiveness, AlphaValue ranks alongside the major research houses in Europe and constitutes the only new entrant to the European space in the past decade. This significant presence is reflected in an unrivalled distribution capability via platforms commonly adopted by investors to access research: Factset, Bloomberg, Capital IQ and the numerous websites. AlphaValue is one the largest research contributors to these platforms, to the benefit of AlphaValue Corporate Services issuer clients.  The AlphaValue Corporate Services analysts are AlphaValue’s sector specialists. Their robust knowledge of the business models in their sectors enables the rapid generation of incisive, relevant research and advantageous interaction with the management teams.

Analysts
Charles Bordes

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