Report
Daniel Grossjohann

Weak margin in Q3 leads to reduced EBIT guidance, sales growth remains sound

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The surprisingly significant deterioration in "EBIT before M&A" margin in Q3 (0.3% vs. 5.4% in Q3 20/21) led to a reduction in EBIT guidance for the current fiscal year. Measures to counter the margin decline due to pandemic/sickness, inflation, sales mix (less licensing business) and macro uncertainties have already been initiated. On a positive note, while geopolitical uncertainty is causing project delays, demand and order intake remain strong and the sales outlook raised in Q2 thus remains valid. We have adjusted our estimates on the margin side, especially for 21/22, as burdening factors such as pandemic-related high sickness absence and geopolitical uncertainties should be temporary. Inflation-related cost increases should be able to be passed on with a time lag. With an EV/Sales below 1, a resilient growth path (digitalization, SAP S/4HANA migration, cloud transformation) and a share of recurring revenues of over 50%, the All for One Group share (EV/Sales 21/22: 0.52) still appears attractively priced to us.

Our price target for the All for One Group share, equally based on DCF valuation and peer group analysis, is €85.30. We reiterate our “Buy” rating.

Underlying
All for One Group SE

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.

Provider
BankM Research
BankM Research

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.

Analysts
Daniel Grossjohann

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