Sales guidance raised, investment phase continues
In the first half of the 2017/18 financial year, All for One Steeb AG (ISIN DE0005110001, Prime Standard, A1OS GY) posted around 14% sales growth, driven primarily by strong organic growth and to a lesser extent (2 percentage points) by inorganic effects. EBIT in H1 rose at a disproportionately low rate of 3%. This is due to investments in the future, which serve to expand the solution and service portfolio. This currently overshadows positive margin effects resulting from the scalability of the growing base of recurring revenues. With the phase of accelerated investments coming to an end in 18 to 24 months, earnings momentum should increase. In our revised estimates, we have reflected the faster-than-expected sales growth while leaving the absolute EBIT expectations virtually unchanged. The DCF valuation in particular implies further price potential.
Our price target for shares in All for One Steeb, based equally on the DCF valuation and the peer group analysis, is €78.50.
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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