Addnode Group: Technia + Transcat = True!

Research Update

2015-11-10

13:25

This is a translated version of our analysis published 2015-11-04 At the consolidated level, Addnode's report for the third quarter was in line with our estimates. However, there were differences among the different business areas. The Product Lifecycle Management (PLM) business area was a clearly positive surprise, driven by the Transcat acquisition. The Design Management business area was impacted to a greater extent than we had expected by the slowdown in Norway, in the wake of falling oil prices. After the end of the quarter, Addnode announced that sales of Autodesk licenses will shift to a subscription model. In this analysis, we review how this change affects our estimates. Furthermore, we are raising our forecast for PLM since the Transcat acquisition has delivered results above our expectations. As a result of the increasing revenue stability, we have also chosen to raise our rating for the company. We are raising our fair value estimate in a base case scenario to SEK 60 (58) per share.

KL

Kristoffer Lindström

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