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SNP Schneider-Neureither & Partner - New $4.5m contract win in North A...
While Q1 revenue grew by 46%, the underlying growth was affected by customers deferring projects, particularly around SAP S/4HANA. However, new orders were healthy, and the book-to-bill ratio jumped to 1.3x. This included part of a $4.5m new contract in the US and we expect FY18 to follow a similar path to FY17 with a stronger than normal H2. Meanwhile, SNP remains focused on bedding down acquisitions and the management team has been restructured to reflect the global nature of the business. Als...
SNP Schneider-Neureither & Partner - Focusing on organic growth
SNP has undertaken a series of acquisitions over the last few years that have transformed the scale and the geographical footprint of the business. The goal is to position the group for the anticipated surge in data migrations globally, particularly around SAP S/4HANA, and SNP has already completed more than 30 S/4 projects. In FY18, management is focused on driving organic growth. We have maintained our headline forecasts, although adjusted net debt rises due to higher-than-expected FY17 net d...
Update: Raising €29m (net) funds for growth
SNP is raising €31m (gross) in a rights issue of new ordinary shares. The new money will fund both organic growth as well as the group’s acquisition strategy. SNP has been experiencing strong demand for its products and services, particularly in the German and US markets, and earlier this year it significantly expanded its operations in Asia, via the acquisitions of Astrums and Hartung Consult. Headcount is expected to rise towards 700 by year end and there is no sign that the activity is sl...
Update: Q1 organic growth was 30%
Business activity remained robust at SNP in Q1, as revenue jumped 52% to €18.5m, including 30% organic growth and an initial €2.6m contribution from the acquired Astrums and Hartung businesses, which were consolidated from the beginning of January. Q1 bookings were very healthy at €26.2m, representing 1.42x Q1 revenues, while the backlog lifted by 52% to €28.7m. Given the buoyant backdrop, we continue to believe the shares look attractive trading on c 18x our maintained FY17 earnings.
Update: Activity in FY16 remains buoyant
Activity remains brisk at SNP, with utilisation rates very high, as the company continues to benefit from favourable structural growth drivers, the partnership with SAP, along with its elevated profile in wake of the landmark Hewlett-Packard deal of 2015. SNP has been winning new business with household names in the US including Kellogg’s. The outlook is supported by the group’s broadening global infrastructure following recent acquisitions, along with two training schemes in the US and Germ...
Update: Underlying FY16 guidance edges up
Provisional FY15 revenues and profit are in line while the new FY16 guidance suggests a small upgrade. FY15 was a year of strong growth for SNP, helped by a prestigious contract to carve out the ERP systems of the demerging Hewlett-Packard. The group has benefitted from a greater number of projects while margins rose on the back of increased project complexity. Our new FY16 forecasts include the two recent acquisitions, along with a 1.6% underlying revenue increase to put our FY16 revenue at the...
Update: Two acquisitions completed
SNP has acquired Hartung Consult, along with Astrums (which was announced separately in early December), to target the Asian market. The pricing details have not been disclosed. Hartung and Astrums know each other well, having worked together as partners, with Hartung focused on China and Astrums on Singapore and Malaysia. Together they boost the group’s technical skills, expanding SNP’s reach into China and Asia more broadly while strengthening the group’s office infrastructure in Germany...
Update: Strong Q4 trading prompts another upgrade
SNP Schneider-Neureither & Partner (SNP) has announced that, due to continued healthy business activity in Q4, it has again raised guidance for FY15. Consequently, we have raised our EPS forecasts by 24% in FY15, by 5% in FY16 and by 2% in FY17. These numbers are before the inclusion of Astrums, the fast-growing, Singapore-based consulting and IT services company, which SNP announced it intended to acquire earlier this month. Given the continuing high level of activity, we believe the shares rem...
Flash note: Asian consulting bolt-on
SNP Schneider-Neureither & Partner (SNP) is seeking to acquire 51% of Astrums, a fast-growing consulting and IT services company that offers solutions around various ERP systems in the Malaysian and Singaporean markets. The price has not been disclosed and SNP plans to increase its shareholding in Astrums over the coming years. The deal strengthens SNP’s skills base, increasing the group’s headcount to just fewer than 500, and puts SNP in a strong position to implement transformation project...
QuickView: New growth strategy is taking effect
In early October, SNP raised its FY15 revenue guidance by c 8%, citing the continued very strong order book and an increase in project sizes. This indicates that business remains robust in the wake of the hefty 68% organic revenue growth in Q2 and 18% in Q1. SNP has been experiencing strong demand for its business transformation consulting services and related software, and utilisation rates remain very high. The Q2 operational highlight was an extensive co-operation agreement with SAP, which we...
Update: Q3 organic revenue growth was c 80%
Activity at SNP Schneider remains extremely busy with Q3 organic growth of around 80%, which was even higher than the 68% achieved in Q2. However, we expect this will be the peak growth rate in this cycle as the comparatives become more challenging. Nevertheless, demand remains very strong and utilisation rates remain exceptionally high, supported by an order backlog up 92% at €20.0m. We have adjusted our forecasts and our earnings forecasts move up modestly in FY16 and FY17. Hence, the shares...
Flash note: Strong trading continues
SNP has raised its FY15 revenue guidance by c 8%, citing the continued very strong order book and an increase in project sizes. This indicates that business remains robust, in the wake of the hefty 68% organic revenue growth in Q2, and 18% in Q1. Following the Q2 results last month, we noted that the group had been experiencing strong demand for its business transformation consulting services and related software, and utilisation rates remained very high. Hence, we made significant upgrades to o...
Update: New growth strategy is taking effect
Q2 organic growth was a hefty 68%, up sharply from 18% in Q1, as SNP extended its rebound from the FY13 low-point. The group has been experiencing strong demand for its business transformation consulting services and related software and utilisation rates remain very high. The Q2 operational highlight was an extensive co-operation agreement with SAP which we believe will help to drive growth. Given the strong Q2 growth and healthy pipeline, we have upgraded our forecasts, which leave the shares ...
Update: Q1 organic revenue growth was 18%
SNP posted a strong set of Q1 numbers with organic revenue growth of 18%, driven by healthy global demand for ERP transformation projects. Activity has been very busy, with consultant utilisation remaining high, and the group has a strong pipeline of new business. Given the confident outlook, we have moved up our revenue forecasts. However, near-term profits edge back due to the increased costs going into the business. Nevertheless, our DCF valuation moves 11% higher, and SNP’s investment case...
Update: FY14 targets are met
Provisional FY14 results were in line with SNP’s targets. Group revenue rose c 30% to €30.5m (we forecast €31.1m), while operating profit was c €1.4m (we forecast €1.6m). Additionally, SNP has concluded the acquisition of a 74.9% interest in RSP, and it has won a significant $5m contract with a leading US computer and IT company. Momentum remains strong, with consultant utilisation close to full. We note the group’s any-to-any strategy gives SNP a key advantage over ERP software vend...
Initiation: ERP software transformation experts
SNP offers solutions that help enterprises to transform their ERP (enterprise resource planning) systems. The group’s SNP Transformation Backbone (T-B) software platform speeds up the process, reducing consultant days and improving quality. The transformation market is large and relatively young, and SNP is expanding into the US and broadening its expertise across ERP systems. Further, it is expanding across the transformation value chain with the proposed acquisition of RSP, a specialist Germ...
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