FREE

Pandemic is changing working processes; many customers are cautious

Note regarding MiFID II: This research report has been prepared by order of the issuer based on a contractual agreement and is being compensated for by the issuer. The research report has simultaneously been made publicly available to all interested persons. Hence, the receipt of this research report is to be regarded as a permitted insignificant non-monetary benefit according to § 64 para 7 sentence 2 No. 1 and 2 of the German Securities Trading Act (WpHG).

All for One Group SE (the change in legal status was completed in July 2020) posted sales of € 267.3m in the first nine months of the 2019/20 financial year, which was around the prior-year level (€ 266.9m). EBIT was € 14.5m (+37%) despite a substantial drop in licence revenues (-32%). The considerable reduction in travel expenses as a result of the pandemic helped on the earnings side and recurring business (€ 138.5m; +7%) continued its solid growth. However, the pandemic has also made customers more cautious: projects are awarded at short notice and also halted at short notice. A strategic initiative where All for One Group is a co-initiator (partners: SNP, SAP and Microsoft) is placing the company in a unique position with regard to SAP S/4HANA: it can offer the switch to SAP S/4HANA for a fixed price (subscription). The benefit for customers is that this reduces uncertainty about costs and personnel requirements. We see this as an important means of extending All for One Group's leading position in the SAP market for SMEs. With an EV/sales multiple of 0.63, shares in All for One Group are still inexpensive.

Our price target for the All for One Group share, equally based on DCF valuation and peer group analysis, is €68.30. We reiterate our “Buy” rating.