Cyclical concerns vs. cloud growth
The 9-month figures of All for One Group AG (ISIN DE0005110001, Prime Standard, A1OS GY) showed 7% revenue growth, with revenues from Cloud Services and Support increasing even faster, by 18%. The ratio of recurring revenue to total revenue rose to a new high of 48%. However, the general cyclical slowdown is becoming more visible at some of All for One Group's established customers (especially in the mechanical engineering and automotive sectors). With deferral of projects becoming more common, it is harder for the group to maintain a high level of staff utilisation. As a result, the EBIT guidance for 2018/19 has been revised downwards. We have therefore reduced our EBIT expectation, which was at the lower end of the previous guidance. However, it seems that the cyclical slowdown had already been largely priced into the share. Looking at fundamentals, shares in All for One remain inexpensive (EV/sales multiple: 0.51; EV/EBIT multiple: 9.4) because the company has not altered its medium-term targets and growth in new customer business remains intact.
Our price target for the All for One Group share, equally based on DCF valuation and peer group analysis, is €69.20. We reiterate our “Buy” rating.
All for One Steeb is a SAP service provider for the midmarket. Co.'s range of product and services include consulting, the sale of software licenses, outsourcing and IT services. Co.'s products and services provide customer support extends from management and technology consulting, software licenses, industry solutions, and optimization projects to software maintenance, outsourcing and managed services from Co.'s data centers' private cloud, and also covers all enterprise processes. Co.'s portfolio also encompasses add-on solutions and services for the SAP Enterprise Resource Planning Human Capital Management platform and SAP SuccessFactors.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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