Value Ideas Blog
Vitec Software AB – Quick Comments on Results

You can find the Key-Highlights for the financial year 2015 below:

 

Net Sales                                                            618,4 Mio. SEK (+25,6%) We expected 622 Mio. and Brokers expected 585 Mio. SEK for 2015 and 626 Mio. for 2017

Operating Cash flow Margin reached           22,5%.

EBIT-Margin                                                    16% (+2%)

EBT                                                                      15%

EPS                                                                      2,66 (+65%) Brokers estimated 2,3

% of Recurring Revenue                                      78%

 

The really good thing in our opinion is, that the CEO clearly states, that they would like to continue to acquire more companies (Vitec has over 100 on the short list and are in direct contact with them) and has enough founding (+130 Mio. SEK) to do so. Furthermore, they have provided the EBIT-Margins of the different Segments. Here our Key Takeaway was that the only mature and fully rolled SaaS product (Energy) achieved an EBIT-Margin of 37%. The other segments achieved Margins, which ranged from 14-23%. Our personal favorite, the Healthcare business achieved a margin of only 9%. Here it has to be said, that they have recently sold their biggest single contract ever, the Diacor contract which is worth~15 Mio SEK over 36 months, which will be rolled out until the end of 2016 and is fully SaaS. With this, we should see an increase in margin, which should bring us easily above 20% in this business.

The Diacor deal brings 5 Mio. I revenue each year and should be pure EBIT!

 

We will update our valuation and come back with our findings shortly, but we clearly think, that Vitec is a position to hold on.