Q1 2019/20: Licence business adversely affected – recurring revenues increase further
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The Q1 figures for All for One Group AG (ISIN DE0005110001, Prime Standard, A1OS GY) showed a slight drop in sales to €92.3m (-2%), while EBIT fell faster (€4.8m, -12%). Taking a closer look, it becomes clear that the principal reason for this was a significant reduction in revenue from licences (-37%), while the strategically significant recurring revenue (€45.8m) increased by 9%. The company has confirmed its guidance, which forecasts growth of at least 4%. We are also leaving our expectations unchanged: growth in recurring revenue remains healthy and the proportion of licence revenue in the sales mix (seasonal high in calendar Q4) will decline over the remaining quarters. With an EV/sales multiple of around 0.6, shares in All for One Group still trade at a favourable price.
Our price target for the All for One Group share, equally based on DCF valuation and peer group analysis, is €72.85. 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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