Restructered - Operations to gather speed
On March 30, MAX 21 AG (ISIN DE000A0D88T9, Basic Board, MA1 GY) reported its preliminary figures for 2016 and elaborated on the operational outcome in a conference call the same day. For the first time, the company presented the results on a consolidated basis (down to EBITDA), including its wholly owned subsidiaries Binect GmbH, KeyIdentity GmbH (KI), and NECDIS GmbH. On group level €6.4 mln in sales revenues were booked resulting in an EBITDA of €-4.2 mln.
KI recorded revenues of €1.4 mln which is nearly a doubling compared to previous year (+87%). The acquisition of BSI (Bundesamt für Sicherheit in der Informationstechnik) as a new client represents a remarkable achievement in the reporting period. It not only validates KI´s top notch status of technology but is likely to entail a signaling effect by multiplying the awareness of KI´s products.
Revenues of Binect came down by 16% to €4.3 mln despite total letter volume processed significantly increased from 61 mln to 80 mln., a 30% gain which became already apparent in the first half of the year. The reciprocal development revenues and volume owes to the fact that the novel platforms Binect Online and Cube were only launched during FY hence contributing little to top line result. Further, less E-POSTBUSINESS BOXes were sold (piling up effect) and overall letter volume via this channel did not meet expectations. However, this unsatisfying situation may change: We consider it a big achievement that in March 2017 not only the contract with Deutsche Post AG has been prolonged for another three years but the revenue model between the partners has been switched from a project-oriented compensation scheme to a click charge based, highly scalable and less volatile model.
Capital increases in 2016 and 2017 raised a total of approx. 8.6 mln earmarked to finance the restructuring process and the advancement of operations.
We expect the substantial restructuring measures during the reporting period to translate into 2017 figures and beyond. Based on the preliminary report we adjust our forecasts and DCF valuation. Given that the overall business success of MAX21 relies on its two core holding companies, we do not consider NECDIS GmbH within the scope of our forecast and valuation approach.
We calculate a fair value of €2.35 per share and confirm our BUY rating.
Max 21 AG, formerly MAX21 Management und Beteiligungen AG, is a Germany-based technology holding that specializes in the areas of information security and digital communications. Among others, the Company holds interests in Binect GmbH and KeyIdentity GmbH. Binect GmbH is a provider of encrypted communication, and develops software that allows or collect and coordinate e-mails from various platforms. In cooperation with Deutsche Post AG, Binect GmbH offers a hybrid business communication and postal distribution solution, including printing, enveloping, franking and delivery. KeyIdentity GmbH provides digital access and identity security solutions. It is a supplier of the LinOTP Product Suite, which is used in adaptive multi-factor authentication.
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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