A 360° view of digitalisation
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All for One Steeb AG (ISIN DE0005110001, Prime Standard, A1OS GY) ended the 2016/2017 financial year with sales growth of 13% (organic: 11%). Its strategy of positioning itself as the central partner for digitalisation - not just for SAP/ERP - for SMEs in German-speaking regions is still putting pressure on margins at present. However, this all-round strategy should pay off in the medium to long term as the rising complexity of digitalisation is increasing demand from SMEs for “complete” future-oriented concepts from a single source. As a result of high investment in expansion of the business with cloud software for lines of business, proprietary sector solutions for SAP S/4 HANA and links to the major platform operators Amazon and Microsoft ("hyperscalers"), EBIT lagged sales growth, rising just 6% in the past financial year, and the EBIT margin was 6.7% (prior year: 7.1%). With a 2017/18 EV/sales multiple of 0.97 and a EV/EBIT multiple of 14.2, All for One Steeb's value is below that of its peers (mean 18e: 1.39 and 15.8). Since our DCF model also continues to indicate an undervaluation, we adhere to our Buy rating, although (in light of the most recent share price increase) the upside is currently limited to about 10%.
Our price target for shares in All for One Steeb, based equally on the DCF valuation and the peer group analysis, is €76.40. We reiterate our “Buy” rating.
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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