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Easyvista 29Th November 2017 a Bet on Renewable Licences TMT Fair Value EUR40 (Price EUR29.60) COVERAGE INITIATED

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Easyvista 29Th November 2017 a Bet on Renewable Licences TMT Fair Value EUR40 (Price EUR29.60) COVERAGE INITIATED CORPORATE RESEARCH EasyVista 29th November 2017 A bet on renewable licences COVERAGE TMT Fair Value EUR40 (price EUR29.60) INITIATED Bloomberg ALSTA FP We are initiating coverage of EasyVista with a DCF-derived Fair Value Reuters ALEZV.PA of EUR40. After years of investment spending, we consider that the 12-month High / Low (EUR) 30.2 / 24.0 software firm could become profitable as of 2018 thanks to the roll-out Market capitalisation (EURm) 49 Enterprise Value (BG estimates EURm) 53 of a new renewable licence model. Avg. 6m daily volume ('000 shares) 0.10 Free Float 21.0% A huge replacement market. EasyVista publishes software that manages 3y EPS CAGR NM Gearing (12/16) NM company IT service desks. Its offer based on mobile access and a codeless Dividend yield (12/17e) NM architecture is an alternative to ServiceNow. Its addressable market totals more than USD3bn and is set to be fuelled by the wide scale replacement YE December 12/16 12/17e 12/18e 12/19e Revenue (EURm) 22.90 27.97 37.60 44.15 of obsolete solutions. EBITA EURm) -1.7 -2.4 2.5 4.8 Op.Margin (%) -7.6 -8.5 6.8 10.8 The switch to renewable licences. Contract catering and services group Diluted EPS (EUR) -0.89 -2.04 1.13 2.19 EV/Sales 2.24x 1.88x 1.33x 1.00x Elior was the first client to sign up to this mode, which consists of EV/EBITDA NS NS 15.7x 8.2x separating the cost associated with using the software in SaaS mode, and EV/EBITA NS NS 19.7x 9.3x the cost of managing the associated IT infrastructure. While this sales P/E NS NS 26.2x 13.5x ROCE NM NM NM NM model, which is to be extended to the entire group in 2018, changes nothing in terms of the reception of licence payments, it enables recognition of 80% of revenue from the contract when it is signed. 35.6 33.6 Margins could take off in 2018. EasyVista has not been profitable since 31.6 2006 due to the switch to the SaaS model and investment spending in the 29.6 US. However, with the EUR4-5m in revenue that the renewable licences 27.6 25.6 could generate in 2018 with no additional expenditure, we estimate that 23.6 EBIT margin could reach around 7% in 2018 and approach 13% in 2020. 21.6 27/05/16 27/08/16 27/11/16 27/02/17 27/05/17 27/08/17 27/11/17 EASYVISTA SXX EUROPE 600 TECHNOLOGY Attractively valued. Our DCF-derived Fair Value of EUR40 is based on the renewable licence model. 2019e EV/EBIT of 9.3x represents a discount of 45-50% relative to the average of European software firms. Analyst: Sector Analyst Team: Gregory Ramirez Richard-Maxime Beaudoux 33(0) 1 56 68 75 91 Thomas Coudry [email protected] Frédéric Yoboué This Report has been sent to you for marketing purposes. It is non-independent research within the meaning of the FSA rules. It is not being held out as an objective or independent explanation of the matters contained in it and should not be treated as such. It has not been prepared in accordance with the legal requirements designed to promote the independence of investment research. Accordingly, the Firm is not subject to any prohibition on dealing ahead of the dissemination of investment research. Please see the section headed “Important information” on the back cover. r r EasyVista Simplified Profit & Loss Account 2020e 2014 2015 2016 2017e 2018e 2019e (EURm) Revenues 19.4 20.2 22.9 28.0 37.6 44.2 50.9 Change (%) 31.7% 4.2% 13.5% 22.1% 34.4% 17.4% 15.2% lfl change (%) 32.0% 4.0% 14.0% 17.0% 32.0% 17.4% 15.2% Adjusted EBITDA (0.03) (2.3) (1.7) (1.8) 3.2 5.4 7.1 Depreciation & amortisation (0.31) (0.31) 0.01 (0.58) (0.65) (0.65) (0.65) Adjusted EBIT (0.33) (2.6) (1.7) (2.4) 2.5 4.8 6.5 EBIT (0.56) (2.9) (3.2) (2.8) 1.8 4.0 5.7 Change (%) -% -% -% -% -% 125% 42.9% Financial results 0.69 0.66 0.36 (2.6) (0.70) (0.77) (0.80) Pre-Tax profits 0.13 (2.2) (2.9) (5.4) 1.1 3.2 4.9 Exceptionals 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tax 0.77 (0.34) 0.04 1.0 0.0 (0.19) (0.66) Profits from associates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Minority interests 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net profit 0.89 (2.6) (2.8) (4.4) 1.1 3.0 4.2 Restated net profit 1.1 (2.4) (1.6) (3.8) 2.1 4.0 5.2 Change (%) -% -% -% -% -% -% -% Cash Flow Statement (EURm) Operating cash flows 0.63 (1.8) (2.0) (3.2) 2.5 4.4 5.7 Change in working capital (0.74) 2.0 0.15 2.0 0.37 1.8 0.57 Capex, net (0.88) (0.15) (0.37) (0.39) (0.50) (0.50) (0.50) Financial investments, net 0.0 0.0 0.0 (0.07) 0.0 0.0 0.0 Acquisitions, net 0.0 0.0 0.0 (1.6) 0.0 0.0 0.0 Dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.30 (0.31) 7.3 (0.10) 0.10 0.0 0.0 Net debt 0.11 0.11 2.3 3.5 1.1 (4.7) (10.4) Free Cash flow (0.99) (0.01) (2.2) (1.7) 2.4 5.8 5.7 Company description Balance Sheet (EURm) Founded in 1988 and listed on the Tangible fixed assets 0.61 0.52 0.53 0.18 0.06 (0.08) (0.22) Intangibles assets & goodwill 1.2 0.76 0.70 1.9 1.1 0.29 (0.49) Alternext compartment of Euronext Investments 0.25 0.18 0.22 0.29 0.29 0.29 0.29 Paris since 2005, EasyVista is a Deferred tax assets 2.0 1.9 2.0 2.0 2.0 2.0 2.0 software vendor that specialises in Current assets 6.1 6.4 6.9 7.9 12.9 14.8 18.1 information technology (IT) Cash & equivalents 2.2 1.3 5.9 5.9 8.3 14.1 19.8 Total assets 12.3 11.0 16.2 18.1 24.7 31.4 39.4 management. The company provides Shareholders' equity 0.29 (3.0) (6.2) (8.4) (7.3) (4.3) (0.07) integrated and modular solutions to Provisions 1.0 0.97 1.3 1.3 1.3 1.3 1.3 cover a range of IT management Deferred tax liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 requirements, including programs for L & ST Debt 2.3 1.4 8.2 9.4 9.4 9.4 9.4 inventories, audits, and asset Current liabilities 8.7 11.6 13.0 15.8 21.3 25.0 28.8 Total Liabilities 12.3 11.0 16.2 18.1 24.7 31.4 39.4 management for IT and Capital employed 0.40 (2.9) (3.9) (4.9) (6.3) (9.0) (10.5) telecommunication equipment, among Ratios others. EasyVista's products are Operating margin (1.73) (13.09) (7.57) (8.54) 6.77 10.78 12.73 primarily marketed under the Tax rate (598) (15.22) 1.51 18.51 0.0 6.00 13.50 EasyVista brand name, offering Net margin 4.61 (12.80) (12.27) (15.74) 2.86 6.86 8.34 ROE (after tax) NM NM NM NM NM NM NM EasyVista Classic (the traditional ROCE (after tax) NM NM NM NM NM NM NM license option) and EasyVista.com Gearing NM NM NM NM NM NM NM (SaaS mode). The Company is Pay out ratio 0.0 NM NM NM 0.0 0.0 0.0 operational in six countries, including Number of shares, diluted 1.59 1.58 1.77 1.85 1.85 1.85 1.85 France, the United States, the United Data per Share (EUR) Kingdom, Spain, Portugal and Italy, EPS 0.57 (1.64) (1.78) (2.66) 0.65 1.83 2.56 Restated EPS 0.69 (1.49) (0.89) (2.04) 1.13 2.19 2.84 and has also a network of over 60 % change -% -% -% -% -% 93.8% 30.1% certified partners in 16 countries in EPS bef. GDW 0.69 (1.49) (0.89) (2.04) 1.13 2.19 2.84 Europe, Africa, the United States, BVPS 0.18 (1.89) (3.53) (4.56) (3.98) (2.34) (0.04) Canada and Asia. Operating cash flows 0.40 (1.15) (1.13) (1.74) 1.35 2.41 3.07 FCF (0.62) (0.01) (1.24) (0.90) 1.28 3.12 3.10 Net dividend 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Source: Company Data; Bryan, Garnier & Co ests. 2 EasyVista Table of contents 1. Investment Case ...........................................................................................................................................4 2. DCF model: EUR40 per share ..................................................................................................................5 3.
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