EUR 231.33 For Business Accounts Only

EBITDA margin increase anticipated based on good revenue. (Prodware)

EBITDA margin increase anticipated based on good revenue. EPS CHANGE CHANGE IN TARGET PRICE€ 15.5 vs 15.4 +0.72% The adjustment of the target price is related to the fine-tuning of our model (see our comments on the change of 2018E EPS). The share price has recovered since the beginning of the year 2019 (+10% ytd) but has underperformed the software sector (+12.3% ytd) (situation on 25 February 19). The stock is trading at low PE ratios (<8x 2018E and <7x 2019E based on a cautious outlook) and could appreciate further when 2018 earnings are released (11 March 19). CHANGE IN EPS2018 : € 1.69 vs 1.61 +4.58% 2019 : € 1.75 vs 1.75 -0.08% The upwards revision of 2018E EPS is due to revenue above expectation (€175.9m vs. €172.2m estimated), thanks to a strong Q4. In 2018, Group EBITDA is now estimated to €32.8m (vs. €32.1m previously), corresponding to a margin rate of 18.6% of revenue (+0.3pt yoy). CHANGE IN NAV€ 23.0 vs 21.9 +4.95% The NAV is based on EV/Sales multiples to value both operating segments, i.e. 2.0x for the Infrastructures and SaaS and 0.8x for the Own Software Solutions in Integration of Business Software Solutions. The upgrade of the NAV is due to the switch to 2019E revenue.

Prodware is engaged in the publishing and hosting of business computer solutions. Co. publishes and integrates management software for accounting management, human resources, customer relations, pay stubs, production, etc. In addition, Co. is involved in the design and implementation of network applications and securitization services. These applications and services include supply of network systems, server installation and hosting, and installation of security software such as antivirus and anti-intrusion. Co. markets its products and services through a network of agencies in France, as well as through partner distributors internationally.

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.

Hélène Coumes

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