Good quarter with reduced profit due to focus on future opportunities

COMPANY ANALYSIS 27 October 2014
Summary
Formpipe Software
(fpip.st)
List:
Market Cap:
Industry:
CEO:
Chairman:
Good quarter with reduced
profit due to focus on future
opportunities


Formpipe Software’s report for the third quarter of
2014 showed revenues slightly above our expectations.
They were at 81.9 million SEK, however with a
resulting net income of only 2 million SEK.
OMXS 30
The third quarter results include those of recent
acquisition of UK-based GXP Limited (“GXPi”), which
underlines the company’s efforts to get a foothold in
the competitive Life Science sector.

No updates to Redeye Rating
Formpipe Software
8
7
6
5
The weaker margins were mainly due to the ongoing
build-up of the Swedish delivery organization and
other costs related to future growth.

Small Cap
266 MSEK
Information Technology
Christian Sundin
Bo Nordlander
4
3
2
1
0
28-Oct
26-Jan
26-Apr
25-Jul
23-Oct
Redeye Rating (0 – 10 points)
Management
Growth prospect
Ownership
4.0 points
7.0 points
Profitability
6.0 points
6.0 points
Financial strength
4.0 points
Key Financials
Revenue, MSEK
Growth
EBITDA
2012
201
2013
294
2014E
347
2015E
376
2016E
397
79%
46%
18%
8%
6%
51
EBITDA margin
EBIT
Pre-tax earnings
Net earnings
Net margin
89
21%
27
112
24%
30
28%
45
60
14%
9%
9%
12%
15%
16
14
20
16
22
16
37
29
54
42
7%
2012
2012
71
22%
29
EBIT margin
Dividend/Share
EPS adj.
P/E adj.
EV/S
EV/EBITDA
65
25%
5%
2013
0.00
0.28
0.0
1.0
3.8
2013
5%
2014E
0.00
0.32
17.7
1.5
6.7
2014E
8%
2015E
0.07
0.33
16.3
1.3
6.3
2015E
5.3
50.1
266
140
Free float (%)
Daily turnover (’000)
80 %
146
11%
2016E
0.11
0.57
9.3
1.1
4.8
Share information
Share price (SEK)
Number of shares (m)
Market Cap (MSEK)
Net debt (MSEK)
2016E
0.17
0.83
6.4
1.0
3.5
Analysts:
Alexander Sattelmaier
[email protected]
Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report.
Redeye, Mäster Samuelsgatan 42, 10tr, Box 7141, 103 87 Stockholm. Tel +46 8-545 013 30. E-post: [email protected]
Formpipe Software
Redeye Rating: Background and definitions
The aim of a Redeye Rating is to help investors identify high-quality companies with attractive valuation.
Company Qualities
The aim of Company Qualities is to provide a well-structured and clear profile of a company’s qualities (or
operating risk) – its chances of surviving and its potential for achieving long-term stable profit growth.
We categorize a company’s qualities on a ten-point scale based on five valuation keys; 1 – Management, 2 –
Ownership, 3 – Growth Outlook, 4 – Profitability and 5 – Financial Strength.
Each valuation key is assessed based a number of quantitative and qualitative key factors that are weighted
differently according to how important they are deemed to be. Each key factor is allocated a number of points
based on its rating. The assessment of each valuation key is based on the total number of points for these
individual factors. The rating scale ranges from 0 to +10 points.
The overall rating for each valuation key is indicated by the size of the bar shown in the chart. The relative size of
the bars therefore reflects the rating distribution between the different valuation keys.
Management
Our Management rating represents an assessment of the ability of the board of directors and management to
manage the company in the best interests of the shareholders. A good board and management can make a
mediocre business concept profitable, while a poor board and management can even lead a strong company into
crisis. The factors used to assess a company’s management are: 1 – Execution, 2 – Capital allocation, 3 –
Communication, 4 – Experience, 5 – Leadership and 6 – Integrity.
Ownership
Our Ownership rating represents an assessment of the ownership exercised for longer-term value creation. Owner
commitment and expertise are key to a company’s stability and the board’s ability to take action. Companies with
a dispersed ownership structure without a clear controlling shareholder have historically performed worse than
the market index over time. The factors used to assess Ownership are: 1 – Ownership structure, 2 – Owner
commitment, 3 – Institutional ownership, 4 – Abuse of power, 5 – Reputation, and 6 – Financial sustainability.
Growth Outlook
Our Growth Outlook rating represents an assessment of a company’s potential to achieve long-term stable profit
growth. Over the long-term, the share price roughly mirrors the company’s earnings trend. A company that does
not grow may be a good short-term investment, but is usually unwise in the long term. The factors used to
assess Growth Outlook are: 1 – Strategies and business model, 2 – Sale potential, 3 – Market growth, 4 – Market
position, and 5 – Competitiveness.
Profitability
Our Profitability rating represents an assessment of how effective a company has historically utilised its capital to
generate profit. Companies cannot survive if they are not profitable. The assessment of how profitable a company
has been is based on a number of key ratios and criteria over a period of up to the past five years: 1 – Return on
total assets (ROA), 2 – Return on equity (ROE), 3 – Net profit margin, 4 – Free cash flow, and 5 – Operating
profit margin or EBIT.
Financial Strength
Our Financial Strength rating represents an assessment of a company’s ability to pay in the short and long term.
The core of a company’s financial strength is its balance sheet and cash flow. Even the greatest potential is of no
benefit unless the balance sheet can cope with funding growth. The assessment of a company’s financial strength
is based on a number of key ratios and criteria: 1 – Times-interest-coverage ratio, 2 – Debt-to-equity ratio, 3 –
Quick ratio, 4 – Current ratio, 5 – Sales turnover, 6 – Capital needs, 7 – Cyclicality, and 8 – Forthcoming binary
events.
Company analysis
2
Formpipe Software
Investing for future growth
Formpipe’s Q3 revenues
slightly beat our
expectations, but margins
were lower due to
expansion activities
Similar to the first quarter, Q3 has historically been a weaker quarter for
Formpipe Software, which was also the case this year after adjusting for the
effect of the GXPi acquisition. At the same time, the company’s sales have
slightly beaten our expectations. After adjusting for the acquisition of
British GXP Ltd. (GXPi) effective July 1st, we expected sales around 79
MSEK for the quarter, while Formpipe delivered 81.9 MSEK. This amounts
to a 9.8% YoY growth excluding the revenue contribution from GXPi (16.5%
including this effect).
Expected vs. Actual
(SEKm)
Sales
Q3'13
70,3
Q3'14E Actual Diff
79,0
81,9
4%
EBITDA
EBIT
EPS
18,9
9,4
0,10
20,0
10,0
0,12
16,8 -16%
5,3 -47%
0,04 -66%
Sales growth YoY
EBIT margin
24%
13%
12%
13%
16%
6%
So urce: Redeye Research
Profitability has however been down, with Formpipe’s Q3 EBITDA-margin
at 21.3% (26.9%), with both the EBITDA of 17.5 MSEK and net profit of 2
MSEK being below our expectations due to increased sales- and other
operating expenses. We see this mainly as an effect of investments in areas
of future growth as well as the use of subcontractors in the Danish
operations.
License and delivery sales
were slightly above
expectations, while sales
costs were much higher
While support and maintenance revenue was according to our expectations,
both license and delivery sales were slightly higher than we expected.
Expected vs. Actual Revenues
(SEKm)
Support and maintenance
License
Delivery
Q3'14E
38,0
12,0
29,0
Actual
38,1
13,0
30,8
Diff
0%
8%
6%
Q3'14E
8,5
14,0
44,1
8,0
Actual
13,2
15,4
44,7
8,9
Diff
56%
10%
1%
11%
So urce: Redeye Research
Expected vs. Actual Costs
(SEKm)
Sales cost
Other cost
Personnel cost
Activated development cost
So urce: Redeye Research
A major difference in the actuals compared to our estimates can be seen in
sales and other costs.
Company analysis
3
Formpipe Software
This is firstly due to investments Formpipe is making in growth areas.
Besides costs resulting from the GXPi acquisition, the company is setting up
operations in the US and Netherlands and in the ongoing process of
building up its delivery organization in Sweden.A second factor affecting
profitability specifically in the Danish operations is that Formpipe uses
subcontractors for the delivery of certain contracts. While this reduces the
margins on these contracts, it helps to increase operational flexibility and
better manage demand fluctuations.
Swedish market back to normal after elections, mixed picture in
Denmark
Focus of Swedish
authorities should be back
to normal after double
elections, while Danish
municipalities remain a
challenging market
The recent elections on both a European and national level have likely
captured a big part of the focus of Swedish authorities. Now that this period
is over, the planning and budget attention regarding IT solutions should be
back to normal, which should be beneficial for Formpipe in the months
going forward.
The municipality market in Denmark on the other hand still remains
somewhat of a challenging environment to be in, with only one contract
closed in 2014. Formpipe has however constantly signed contracts with
other segments in the Danish public sector, reinforcing their positioning as
a provider of choice in the overall market. An additional option for
accelerated growth in this area could be increased upselling to existing
customers, which is potentially faster than the sell-in process for new
clients.
Acquisition of GXPi underlines efforts in Life Science market
Effective at the beginning of the third quarter, Formpipe acquired UKbased GXPi, which provides compliance solutions to clients in Life Science.
The firm is active in both Europe and the US, and features several of the
leading multinationals in the sectors as its clients.
GXPi acquisition could be
a key lever for entering
the Life Science market
successfully
Formpipe Software mentions in their report that they had evaluated
acquisition opportunities regarding this market segment for a while, and
identifies several key benefit areas. The perceived key benefits lie in the
takeover of an established sales force and years of product and delivery
experience in the Life Science, as well as new cross-sales opportunities,
both for Formpipe’s Platina QMS as well as GXPi’s cloud-based QMS
solutions for small and medium sized client firms.
We see it as positive that the founder and CEO of GXPi will lead the new
merged Life Science business area within Formpipe, and as it seems also
the remaining leadership of GXPi remains in the company.
Company analysis
4
Formpipe Software
In addition, the acquisition has been structured with a performance-based
component, allowing for a further maximum 3,5 million GBP purchase
price calculated as a 50% share of the EBITDA contribution over 3 years of
the new combined Life Science team.
Compared to the 1,3 million GBP initial purchase price (of which around
50% was paid in cash and the other half in newly issued shares), this is a
quite heavy performance incentive for the new business area, which we see
as a catalyst for the market traction of Formpipe’s Life Science solutions
going forward.
Financial position
Formpipe’s net debt
reduction slowed down,
but the GXPi acquisition
was done without
additional external
financing
Total interest-bearing debt was further reduced to 147 MSEK (166 MSEK)
while net debt was at 140 MSEK (160 MSEK). The reduction of net debt
after the major acquisition in 2012 therefore seems to have slowed down
somewhat. This was however partly due to the financing of the GXPi
acquisition without raising any additional financing, which shows the
ongoing commitment of Formpipe to the reduction of their debt position. In
addition, some of the reduction in amortization is a pure accounting effect,
due to exchange rate differences as part of the debt is denoted in Danish
crowns.
Company analysis
5
Formpipe Software
Financial forecasts
Seasonally weak third
quarter and bigger
expectations for Q4 –
although signing of major
contract with Stockholm
city is delayed further
After the second quarter had been in line with the previous year’s
development, also the third quarter followed historical patterns, showing a
slower sales growth after adjusting for the GXPi acquisition. The
expectations for the upcoming fourth quarter are therefore as usual higher,
since this is seasonally the best performing time in the financial year. We
have adjusted our expectations higher to include the revenue contribution
of GXPi. It is however unclear whether sales patterns in the life science
sector follow the seasonality of the rest of Formpipe’s business, and we will
follow the future developments in this regard.
The signing of a major contract with the city of Stockholm is now further
delayed, after a competitor had requested a review of the contract allocation
process, which is not unusual in the industry. Unfortunately, the allocation
process has been declared as uncompliant in the first instance, but both the
city of Stockholm and Formpipe have used their right to oppose this
decision. During the next weeks, a decision will be made whether this
opposition is approved. In that case, a potential following review of the case
in the next court instance could take several months, so that a potential
positive outcome of the case probably can be expected by Q2 2015.
A high share of recurring
revenues contributes to a
strong cash flow and
lowers the company’s risk
profile
Formpipe’s business model builds on a combination of recurring license as
well as support and maintenance revenues, which the client either pays as
part of a SaaS (Software as a Service) licensing model or in addition to a
delivery fee for initial implementation of the software. How clients choose
to negotiate the model for the recurring fees has a significant impact on
Formpipe’s license revenues and margins in individual quarters, but makes
no major difference in the long run. The trend, in accordance with the
overall software industry, goes towards more clients opting for a SaaS
model, similar to hiring a solution. The analysis below focuses on the steady
growth of support and maintenance revenues, which is a critical driver for
long-term profitability in the firm. Around 50% of revenues are now
recurring, which is a big stability factor for the firm.
Company analysis
6
Formpipe Software
No major adjustments have been made to our estimates for 2014, apart
from the inclusion of GXPi, which we expect to have a positive EBIT
contribution from around the second half of 2015.
Actuals & Forecasts
(SEKm)
2013
Q1'14
Q2'14
Q3'14
Q4'14E
2014E
Sales
294
79
84
82
102
347
Q1'15E Q2'15E Q3'15E Q4'15E
92
94
85
105
2015E
376
EBITDA
EBIT
PTP
EPS (SEK)
65
27
20
0.32
15
5
3
0.06
16
6
4
0.06
17
5
3
0.04
23
13
11
0.17
71
30
22
0.33
22
11
9
0.14
23
12
10
0.16
19
8
6
0.08
25
14
12
0.19
89
45
37
0.57
Sales growth YoY
EBIT margin
EPS growth YoY
46%
9.3%
15%
18%
6.7%
609%
16%
7.1%
56%
16%
6.5%
-60%
21%
12.8%
-3%
18%
8.6%
1%
16%
12.0%
147%
12%
13.0%
160%
4%
8.8%
108%
3%
13.7%
12%
8%
12.0%
75%
Source: Redeye research
Valuation
Our DCF valuation
motivates a value of 8.7
SEK per share
Since the acquisition of GXPi, mainly due to its size and the chosen
performance-based purchase pricing, had no major long-term effect on the
debt and risk profile of Formpipe, our WACC remains at 11 percent. We
calculate with an average growth of 4,8 percent between 2016 and 2023 and
an EBIT margin of 15 percent. The resulting motivated value per share is
8.7 (9) SEK.
Bull case
The bull scenario value is
15 SEK per share
In a bull scenario, both the long-term archiving and Life Science
propositions will get traction in the market under 2015 and contribute to
sales and profit above current expectations. The overall market conditions
for the firm increase somewhat and all in all, revenues therefore increase
quicker at an average rate of 7,5% while long-term average EBIT margin
would be at 20%. This results in a motivated value of 15 SEK.
Bear case
A bear case development
indicates a value of 4 SEK
per share
In our bear case, neither the long-term archiving nor the Life Science
solutions get significant traction in the market. The overall market remains
somewhat on hold, meaning that sales growth and resource utilization for
Formpipe Software will be slower as a result. All in all, revenues would
increase at an average 4% and long-term average EBIT margin would lie at
11%. The resulting motivated value is 4 SEK.
Stock and owner information
Formpipe still misses a
strong major shareholder,
which we see as a long
run disadvantage
Median turnover in Formpipe’s stock during the last 12 months was at
around 146 000 shares per day. A key weakness in the firm today is in our
opinion the lack of a strong major shareholder, the addition of which would
be beneficial for Formpipe in the future. We have not seen any major
changes in the shareholder structure since our last update after Q1 2014.
Company analysis
7
Formpipe Software
Investment Case - Formpipe
Formpipe helps to
manage an ever
increasing flow of
information
Formpipe’s solutions help its clients to manage an ever increasing flow of
information, which is a strong underlying driver for the business. The firm
has a stable customer base which primarily consists of public sector actors
in Sweden and Denmark, with a strong base of recurring revenues which
creates stability in the business. Growth opportunities exist both in existing
as well as new markets, such as the Life Science sector.
The company has several
key growth opportunities
which have not yet gotten
full market traction
Formpipe has several organic and acquisition-based growth opportunities.
Cross-selling can be realized by bringing solutions from the Swedish to the
Danish market and vice versa, which is a result of the Traen acquisition in
2012. We expect such cross-selling to contribute positively to growth during
2015. In addition, Formpipe has created an offer targeted at the Life Science
sector called Platina QMS (quality management system), which can be a
future growth driver for the firm. The Life Science industry shares many
parallels with the public sector as it is highly regulated by rules and
regulations, not least from the US FDA (Food and Drug Administration).
Life Science is however a highly globalized market, which could be of
importance for Formpipe since current public sector solutions are rather
customized to individual geographic markets. We see Formpipe's
acquisition of UK-based GXPi, a provider of compliance management
solutions to the Life Science sector, as a confirmation for this, since the UK
is one of the hubs for Life Science within Europe and globally.
Another product-based opportunity is Formpipe's solution for long-term
archiving, where Formpipe is continuing to carry this solution it developed
out to the market. While the benefit proposition for customers is strong, the
market seems to take its time to adapt such solutions. As a result, we expect
this area to gain traction earliest during 2015.
Formpipe’s two key
growth opportunities
have not been priced in
yet
Stable cash flows reduce
risks, but the market
competition is a risk
The current stock valuation has not priced in a full successful
commercialization of both key growth opportunities described. After a
slowing market 2013, Formpipe exceeded our revenue expectations for
most of 2014. At the same time, profitability was put under pressure due to
growth-related costs, which impacted the stock development. For 2015, we
however continue to see Formpipe as a strong player in a stable market,
with two opportunities for additional growth in the Life Science and longterm archive propositions. If any one of these gain significant traction in the
market, a strong revaluation of the stock might be possible.
Key risks in the stock are mainly related to the level of debt, a result of the
acquisition in Denmark 2012, in addition to increased competition both
from local players as well as international firms. Another risk is that the
public sector might face reduced budgets over time and therefore might have
less economic freedom to invest in systems such as Formpipe’s.
Company analysis
8
Formpipe Software
Summary Redeye Rating
The rating consists of five valuation keys, each constituting an overall
assessment of several factors that are rated on a scale of 0 to 2 points. The
maximum score for a valuation key is 10 points.
Rating changes in the report
No changes to Redeye Rating
Management 7.0p
Formpipe Software's CEO Christian Sundin has a long experience from
the IT sector, has worked with Formpipe since 2006 and is
knowledgeable about the market. The company has no specific financial
goals, which would be positive to have. Management shows however a
high ambition level for the firm by using both product development and
acquisitions to get into new markets. The acquisition of Traen and the
following equity issue however still surprised many stockholders and
could have been announced through clearer communication by the
company.
Ownership 4.0p
The ownership rating for Formpipe Software is relatively weak since the
company currently misses an active major shareholder, which we see as a
disadvantage. On the positive side, CEO Christian Sundin, CFO Joakim
Alfredson as well as Head of Sales & Marketing Erik Lindberg all have
relatively high holdings in the firm's stock. The company also has a
number of institutions among its major shareholders, which is positive.
Growth prospect 6.0p
Profitability 6.0p
Formpipe Software's market seems stable with underlying growth.
Customers are mainly from the public sector and a big part of revenues
are recurring, which creates stability in the business model. We see good
growth possibilities since the company has both cross-sales opportunities
between its Danish and Swedish operations after the Traen acquisition.
In addition, new solutions for long-term archiving and the Life Science
sector are being established in the market, but have not seen their
breakthrough yet.
Formpipe's profitability has been relatively stable apart from some
quarters. Recurring revenues are increasing, mainly due an increase of
sales through a SaaS-model (Software as a Service). This in turn can
influence profitability in individual quarters quite heavily since license
revenues temporarily could be lower, which has a big impact on the net
margin. In the long run, we see this however as being positive for the
firm's profitability.
Financial strength 4.0p
Before the acquisition of Traen, Formpipe Software had negative net
debt. Due to the acquisition, the capital strength rating has however
decreased since the debt level increased. Since the company has a clear
amortization plan, we expect to increase the rating over time as the debt
level decreases.
Company analysis
9
Formpipe Software
Income statement
Net sales
Total operating costs
EBITDA
2012
201
-150
51
2013
294
-230
65
2014E
347
-276
71
2015E
376
-287
89
2016E
397
-285
112
Depreciation
Amortization
Impairment charges
EBIT
-22
0
0
29
-37
0
0
27
-41
0
0
30
-44
0
0
45
-53
0
0
60
Share in profits
Net financial items
Exchange rate dif.
Pre-tax profit
0
-13
0
16
0
-8
0
20
0
-8
0
22
0
-8
0
37
0
-6
0
54
-2
14
-3
16
-5
16
-9
29
-12
42
2012
2013
2014E
2015E
2016E
4
103
0
0
107
20
90
0
0
110
10
107
0
0
118
15
124
0
0
139
3
0
0
438
0
0
27
468
0
3
0
1
449
0
0
28
482
0
3
0
1
497
0
0
0
501
30
575
592
650
Tax
Net earnings
Balance
Assets
Current assets
Cash in banks
Receivables
Inventories
Other current assets
Current assets
Fixed assets
Tangible assets
Associated comp.
Investments
Goodwill
Cap. exp. for dev.
O intangible rights
O non-current assets
Total fixed assets
Deferred tax assets
Total (assets)
10.9 %
Assumptions 2015-2021 (%)
Average sales growth
4.3 %
EBIT margin
15.0 %
Cash flow, MSEK
NPV FCF (2013-2015)
NPV FCF (2016-2022)
NPV FCF (2023-)
Non-operating assets
Interest-bearing debt
Fair value estimate MSEK
37
221
329
20
-172
436
Fair value e. per share, SEK
Share price, SEK
8.7
5.3
Profitability
ROE
ROCE
ROIC
EBITDA margin
EBIT margin
Net margin
2012
7%
10%
19%
25%
14%
7%
2013
6%
6%
5%
22%
9%
5%
2014E
6%
6%
6%
21%
9%
5%
2015E
10%
9%
7%
24%
12%
8%
2016E
13%
12%
10%
28%
15%
11%
20
139
0
0
159
Data per share
EPS
EPS adj
Dividend
Net debt
Total shares
2012
0.28
0.28
0.00
3.92
48.94
2013
0.32
0.32
0.00
3.09
48.93
2014E
0.33
0.33
0.07
3.64
50.14
2015E
0.57
0.57
0.11
3.18
50.14
2016E
0.83
0.83
0.17
2.55
50.14
4
0
1
497
0
0
0
502
30
4
0
1
497
0
0
0
502
30
Valuation
EV
P/E
P/E diluted
P/Sales
EV/Sales
EV/EBITDA
EV/EBIT
P/BV
2012
192.0
0.0
0.0
0.0
1.0
3.8
6.7
0.0
2013
430.2
17.7
17.7
0.9
1.5
6.7
15.8
1.0
2014E
448.4
16.3
16.3
0.8
1.3
6.3
15.1
0.9
2015E
425.4
9.3
9.3
0.7
1.1
4.8
9.4
0.9
2016E
393.8
6.4
6.4
0.7
1.0
3.5
6.6
0.8
671
691
Share performance
1 month
3 month
12 month
Since start of the year
Liabilities
Current liabilities
Short-term debt
Accounts payable
O current liabilities
Current liabilities
Long-term debt
O long-term liabilities
Convertibles
Total Liabilities
Deferred tax liab
Provisions
Shareholders' equity
Minority interest (BS)
Minority & equity
17
137
0
154
179
0
0
333
0
0
242
0
242
15
154
0
168
157
0
0
325
0
0
267
0
267
17
173
0
190
176
0
0
366
0
0
283
0
283
15
188
0
203
159
0
0
363
0
0
308
0
308
13
199
0
212
135
0
0
347
0
0
345
0
345
Total liab & SE
575
592
650
671
691
Free cash flow
Net sales
Total operating
costs
Depreciations total
EBIT
Taxes on EBIT
NOPLAT
Depreciation
Gross cash flow
Change in WC
Gross CAPEX
DCF valuation
WACC (%)
2012
201
-150
2013
294
-230
2014E
347
-276
2015E
376
-287
2016E
397
-285
-22
29
-4
24
22
47
12
-336
-37
27
-4
23
37
60
29
-51
-41
30
-7
23
41
64
2
-61
-44
45
-10
35
44
79
-2
-44
-53
60
-13
46
53
99
-4
-53
Free cash flow
-278
39
6
32
42
Capital structure
Equity ratio
Debt/equity ratio
Net debt
Capital employed
Capital turnover
rate
2012
42%
81%
192
434
0.4
2013
45%
64%
151
418
0.5
2014E
44%
68%
183
466
0.5
2015E
46%
57%
160
468
0.6
2016E
50%
43%
128
473
0.6
Growth
Sales growth
EPS growth (adj)
2012
79%
-77%
2013
46%
15%
2014E
18%
1%
2015E
8%
75%
2016E
6%
46%
-13.1
-15.2
-8.6
-4.5
Shareholder structure %
Avanza Pension Försäkring AB
Swedbank Robur fonder
SHB fonder
Nordnet Pensionsförsäkring AB
SEB fonder
Andra AP-fonden
Humle fonder
Wallinder & Co AB
Wernhoff Thomas
Lindeberg Erik
Share information
Reuters code
List
Share price
Total shares, million
Market Cap, MSEK
Management & board
CEO
CFO
IR
Chairman
Financial information
FY 2014 Results
Analysts
Alexander Sattelmaier
[email protected]
Company analysis
10
%
%
%
%
Growth/year
Net sales
Operating profit adj
EPS, just
Equity
Capital
9.3 %
6.1 %
5.6 %
4.7 %
4.6 %
4.2 %
4.0 %
2.7 %
1.7 %
1.5 %
12/14e
31.3 %
1.8 %
7.9 %
8.2 %
Votes
9.3 %
6.1 %
5.6 %
4.7 %
4.6 %
4.2 %
4.0 %
2.7 %
1.7 %
1.5 %
Small Cap
5.3
50.1
265.8
Christian Sundin
Joakim Alfredson
Bo Nordlander
February 10, 2015
Redeye AB
Mäster Samuelsgatan 42, 10tr
111 57 Stockholm
Formpipe Software
Revenue & Growth (%)
EBIT (adjusted) & Margin (%)
450
400
350
300
250
200
150
100
50
0
90,0%
80,0%
70,0%
60,0%
50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
2011
2012
2013
2014E
Net sales
2015E
70
50
40
30
20
10
0
2016E
2011
2012
2013
Net sales growth
2014E
EBIT adj
Earnings per share
2015E
2016E
EBIT margin
Equity & debt-equity ratio (%)
1,4
1,4
0,7
1,2
1,2
0,6
1
0,5
0,8
0,8
0,4
0,6
0,6
0,3
0,4
0,4
0,2
0,2
0,2
0,1
1
0
0
2011
20,0%
18,0%
16,0%
14,0%
12,0%
10,0%
8,0%
6,0%
4,0%
2,0%
0,0%
60
2012
2013
EPS, unadjusted
2014E
2015E
0
2016E
2011
2012
EPS, adjusted
2013
Equity ratio
Sales division
License revenues
90,0%
80,0%
70,0%
60,0%
50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
2014E
2015E
2016E
Debt-equity ratio
Geographical areas
Support and maintenance
Delivery
Conflict of interests
Company description
Alexander Sattelmaier owns shares in the company : No
Since its start in 2004, Formpipe showed strong growth and increasing
margins. The firm's main sales focus is in the public sector, reducing
sensitivity to economic cycles. Recently, an additional focus on
selected private market actors has been added with the Life Science
segment. Increasing recurring revenues from support and
maintenance make Formpipe's business model attractive.
Redeye performs/have performed services for the Company and
receives/have received compensation from the Company in connection
with this.
Company analysis
11
Formpipe Software
DISCLAIMER
Important information
Redeye AB ("Redeye" or "the Company") is a specialist investment banking boutique that focuses on small and mid-cap growth companies in the Nordic
region. We focus on the IT, life sciences, media, betting, clean tech and commodities sectors. We provide services within Corporate Broking, Corporate
Finance, equity research, investor relations and media services. Our strengths are our award-winning research and analysis department, experienced
advisers, a unique investor network, and powerful distribution channel redeye.se. Redeye was founded in 1999 and since 2007 has been subject to the
supervision of the Swedish Financial Supervisory Authority.
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Limitation of liability
This document was prepared for information purposes for general distribution and is not intended to be advisory. The information contained in this
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
For companies that are the subject of Redeye’s research analysis, the applicable rules include those established by the Swedish Financial
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
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
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Redeye does not issue any investment recommendations for fundamental analysis. However, Redeye has developed a proprietary analysis and rating
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usually less than 1 month.
Redeye Rating (2014-06-10)
Rating
7,5p - 10,0p
3,5p - 7,0p
0,0p - 3,0p
Company N
Management
Ownership
22
43
1
66
28
32
6
66
Growth
Prospect
11
54
1
66
Profitability
4
30
32
66
Financial
Strength
16
26
24
66
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Copyright Redeye AB.
Company analysis
12